Until now, Wales has led the UK in the regulation of letting agents. Since November 2016, anyone letting and managing property has had to apply for a licence and provide evidence they have undergone training, either via Rent Smart Wales or with one of the scheme’s authorised providers . However, the penalties for non-compliance are not yet severe enough to bother those who want to lurk under the radar and there is no requirement for agents to join an approved professional body, such as ARLA or RICS.
But, as of the end of January, Scotland will once again be waving the flag for getting a grip of its letting industry. In 2006, it was the first country to introduce a PRS register, requiring all private landlords to apply to their local council with details of themselves and their properties. The council then makes checks to satisfy themselves that the applicant is a ‘fit and proper person’ to let property. Those found not to be registered can be fined up to £50,000 and banned from registering for up to five years – quite a deterrent.
And now it’s the agents’ turn. Between 31st January and 30th September, all letting and managing agents in Scotland must sign up to the Letting Agent Code of Practice. They will have to:
- be deemed a ‘fit and proper’ person
- undergo training and secure qualifications
- belong to a Client Money Protection (CMP) scheme, and
- hold Professional Indemnity insurance.
Any agent who tries to continue to operate without signing up can be fined up to £50,000 and could face 6 months in prison, which hopefully should be enough to make the bad eggs think twice about trying to swerve the law.
The big hurdle for unscrupulous agents to overcome is going to be CMP, because they have to satisfy insurance companies that they can meet their compliance requirements. Agents who are members of ARLA or RICS (and that’s pretty much all the decent ones) are already required to hold CMP so, if your managing agent doesn’t currently belong to one of these professional bodies, you might want to consider moving to one who does.
Mike Campbell, Director of The Council of Letting Agents (CLA), the largest agent membership body in Scotland, is of the opinion that the Scottish Government leads the way in the UK with its clear overall strategy for the PRS. Importantly, it recognises the important role played by good letting agents in helping the private rented sector to be professional and well managed, providing good-quality homes that people need.
Mike says: “The CLA called for letting agent regulation and worked closely with the Scottish Government in shaping forthcoming requirements because good agents were fed up with being tarred by the same brush as the minority of agents whose standards fall short. I’m particularly optimistic that the further requirement to have written procedures in place for all detailed aspects of letting agency work will be a significant step forward in improving the consistency of standards across the sector. The CLA is pleased to have prepared a suite of template procedures for The Scottish Government to make available to all agents willing to come on this exciting journey in Scotland.‘’