ARLA calls for rogue letting agents to be banned from industry

ARLA has told the Government that it should make it a legal requirement for all letting agents to belong to a Client Money Protection scheme.

It has also told ministers that all letting agents should be professionally qualified and required to undertake Continuous Professional Development – and that rogue agents should be banned from the industry.

ARLA wants to see bans in place whereby prohibited sales agents cannot work in lettings.

Calling for a scheme similar to the London Rental Standard to be placed on the statute books, ARLA said that regulation would ensure fairness and “the removal of those agents who bring the industry into disrepute”.

The calls to action are made by ARLA in its official response to the Communities and Local Government consultation on its discussion paper, Tackling rogue landlords and improving the private rental sector.

The paper represents a landmark in the industry, the first time that the Government has proposed a mechanism for banning bad letting agents. Currently, only sales agents can be banned, under the Estate Agents Act.

In its notably robust response, ARLA backs the proposals – but goes a lot further.

It criticises the current low number of prosecutions for housing offences and says that the fines should be ring-fenced and pay for further enforcement.

It also calls for the Sentencing Guidelines Council to set judicial guidelines, with unlimited fines.

ARLA says that culpable individual letting agents rather than companies should be banned from trading, pointing out that if a firm is banned, there is nothing to stop its directors simply starting up a new company.

The body also says that rather than create a blacklist of rogue landlords and letting agents – as DCLG is proposing – it would be better to extend the Estate Agents Act 1979 to include letting agents and, potentially, landlords.

The ARLA response says: “Many letting agents are also sales agents and therefore regulated under the Estate Agents Act 1979. This presents us with an opportunity to remove the current situation where an estate agent can be banned from selling properties but is still legally allowed to undertake lettings activities.

“Should a blacklist and banning orders come into being, we would strongly urge the Government to ensure sufficient dialogue between the body responsible for administering the blacklist and any register of banning orders and Powys County Council in order to ensure both bodies are aware of new entrants on to either list and ensure that any individuals banned from one activity are also banned from the other.”

ARLA also calls for any blacklist to be made publicly available.

The discussion paper also proposes a regime of civil penalties imposed on landlords and agents.

ARLA says: “Fines currently issued by courts are very low and provide only a limited deterrent to criminal landlords.

“By way of an example, there has been a recent case where a property had no smoke alarms, no hot water and a cockroach infestation. The landlord only received a £350 fine, £324 in costs and a £35 victim surcharge. The landlord had failed to fully comply with the notice to improve the property and pled guilty by post. The landlord was receiving £750 a month in rent and the maximum penalty available to the court was fines totalling £20,000.

“In many cases criminal landlords are now accepting these low fines as another operating cost to their business. Fines of less than one month’s rent are not a sufficient deterrent.”

ARLA calls for £5,000 fines to be standard.

The consultation was launched on August 3 and closes today at 11.45am.

You can find it here

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15 Comments

  1. WPD

    London in particular is a vipers nest. New unregulated agents springing up everywhere preying upon the large inflows of workers who think agents are regulated like France Germany etc. The answer is compulsory membership of one association, properly regulated and with power to fine and remove a licence to practice.

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  2. Denise

    Wow – The new leadership at ARLA has, at last, decided to set the pace and to go in all guns blazing !!!  I am impressed – and that’s the first time  since becoming an ARLA member way back in the 1990’s.

     

     

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  3. smile please

    ARLA calling for all letting agents to be licensed and fined £5000 – Surely not!!!! – Oh hang on means that there subscription numbers increase and they can be more aggressive on fees.

    Regulation is a myth, it will only penalize honest agents. A corrupt agent will just not join. There are already a number of rules and laws to follow but some agents do not. All that needs to happen is for these existing laws to be enforced, and it is down to other professionals to report them if they suspect anything.

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    1. Robert May

      Until cockroaches learn to read and obey the signs (not eat them) you won’t keep them out of the kitchen.

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  4. Gump

    This has been “called for” by many different bodies, it’s about time someone “Did” rather than “Talked” But, alas, it will not happen, and in the unlikely event it does, good luck policing it

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    1. Robert May

      You are right; regulation that is easily circumvented will be circumvented.

      If CMP  and redress was only available through ARLA (acting as an intermediary not as a sole suppliers), only ARLA agents with the obligatory audit  requirement would be able to trade legally.  The off the shelf availablity of both CMP and redress  allows rogues to trade legally without inspection.

      I terms of someone doing, someone is, but  they are providing a means to compete rogues out of the industry not regulate them out. Starving them out of existence is more instant in the short term and more effective in the long term.

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      1. Gump

        With the new immigration checks being forced upon us, I fear rogues will be popping up all over the place.

         

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        1. smile please

          Do you?

          i don’t think it will increase the number of rogue lettings agents. But i do think it will effect the amount of rouge landlords who let directly.

          Instead of trying to penalise agents who not go to the source and make every landlord use a letting agent? Surely this will be better than a blanket licensing system some councils are bringing in. At least there is value for money to the landlord and they are policed by the letting agents.

          In my opinion there are very few “Bad” agents out there that break the law. Sometimes service maybe shoddy but i would not say many are corrupt.

          If you look at any of the TV exposure programmes, nearly always the problem properties are landlord direct.

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  5. ElTel

    With reports of crooked letting agents disappearing with client money almost a weekly occurrence ARLA,’s beefing up its call for regulation is to be applauded, but just having CMP alone is not the answer.  The  TDS has riculously complicated hoops for tenants to jump through for their deposit to be returned in the case of theft by an agent. NALS too should be asking themselves if their check of members client accounts is rigorous enough and the Courts must hand down custodial sentences to crooked letting agents.

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    1. Robert May

      With respect as I have said before, not all crooked agents are crooked agents, some are hapless victims of a single event in December 2008!

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      1. ElTel

        With equal respect Robert, if an agent steals client money by spending what is not his he is a thief and by definition, crooked!

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  6. RealAgent

    Calling for regulation is one thing but as members, what I really want to see is ARLA spending some money educating the public about the additional protection afforded them by an ARLA member. Its all very well issuing marketing material for the agents to distribute, but perhaps they should be thinking of tv/press campaigns highlighting the issue. If you want to change something, you need a sway of public opinion, not just the opinion of an industry related organisation that itself isn’t mandatory to join.

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    1. smile please

      Perfectly worded. This is the issue i have with voluntary schemes.

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      1. MF

        To be fair, ARLA are running some tv/press campaigns: http://www.arla.co.uk/info-guides/videos.aspx

        I do think they’re getting much better at this recently.

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        1. RealAgent

          With the greatest respect, Ive just watched that and the words limp and lettuce spring to mind. Its also dated 2014 so with the exception of perhaps yourself MF, I wonder how many people saw it. I see OTM and Purplebricks adverts all the time.

          I remember a time when ARLA was pretty much a must join organisation for Lettings Agents, it isn’t now and won’t be again until landlords feel reassured that their agent is a member of it. At that point make calls for regulation by all means.

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