Government responses to policy consultations are a little like buses, you wait around for ages and then three turn-up together.
Of course the way in which they differ from buses is that you can absolutely guarantee that government statements will turn-up, like clockwork, every significant bank-holiday – and this Easter was no exception.
No sooner had everybody switched off and gone home to enjoy a rare Friday with their loved-ones when the Ministry woke up and started warning that announcements were coming – most probably on Sunday!
And so it came to pass, appropriately, that Easter Sunday was the day that the Ministry chose to resurrect its many, many letting agent policies
Of course this also meant that the Government had chosen April fools’ day to confirm its most wide-ranging package of letting agent regulation in decades – this may or may not be seen as significant in hindsight.
You could have been forgiven for missing the press release, published as it was on a bank-holiday, preceded and followed by other bank holidays, but never the less the news was significant.
Client Money Protection
The writing as been on the wall for some time in respect of client money protection insurance, or CMP. The majority of the industry, including UKALA, accepts that although sometimes costly, CMP is a beneficial safeguard in an industry with a less than stellar reputation. The long-standing problem has been that the responsible amongst us pay for insurance, while others skip CMP and use the financial savings to undercut the rest.
Fortunately, UKALA members are well covered in this respect with comprehensive client money protection cover.
Code of Practice
The announcements also reiterated the Government’s commitment to a single, mandatory and legally enforceable code of practice for letting agents.
The code will provide minimum standards for:
- Transparency of potential conflicts of interest
- Transparency of current and future financial commitments to which clients are agreeing
- Service charges
- Communication and customer service
- Handling of clients’ money; and
- Dispute resolution
Perhaps the biggest single new commitment to create, through primary legislation, an independent regulator of letting agents with powers to:
- Ban agents
- Impose financial sanctions; and
- Inspect properties
It will become a criminal offence to continue to operate when banned by the regulator, and the regulator is expected to act as a consumer champion – in a manner to be determined.
Finally, the Ministry announced that a ‘nationally recognised’ qualification would be mandated in the future, although exactly what form this will take seems to be up for discussion.
The announcements stipulated that there is to be a requirement to obtain an entry requirement of sorts, backed up by continued professional development, but the details are yet to be determined.
Well, none of the announced regulation is in place yet, or likely to come into force in the immediate-term.
It is quite likely that the mandation of CMP will come about first, potentially as early as October 2018.
A lot of work has already taken place within the industry on a potential code, which could be adopted in fairly short order. However, the creation of a regulator will require primary legislation; so is most likely a year or more away.
Training requirements may well stem from the code, but would require some form of enforcement – presumably courtesy of the new regulator.
In the mean time?