At the recent TPO Conference there was a suggestion (or was it a formal proposal?) from James Munro, the head of the National Trading Standards Estate Agency Team (NTSEAT) that his team would be better equipped to fulfil its regulatory role if sales agents paid a levy towards the cost of regulating the industry.
As the ‘old’ Ombudsman I was not at the conference but I understand there was a mixed reaction to such a concept.
The idea that an industry pays to be regulated is not a new one, as those in the world of financial services will be well aware. In that industry the Government imposed a structure of self-regulatory bodies (initially five with an overseeing supervisory organisation) all funded by a levy on suppliers of financial services which also had to meet the costs of their own internal compliance departments. Despite developments in the legislation, a huge rulebook and bureaucracy still exists.
Regulation of the property sector may not be seen by the current Government as a priority but eventually in my view it is going to happen. Probably that will be in the Private Rented Sector first as that sector seems to be the one ‘under siege’ (as the current ARLA President has commented), but wherever and whenever it strikes it has to be realistic, avoid stunting business and be comprehensible to the consumer.
NAEA and ARLA agree that regulation is desirable to weed out the ‘rogue’ element in the property sector, but again they see this as needing to be at an appropriate level and for costs to be contained.
If the industry makes a contribution at a reasonable level, then some structure could be put in place that makes the agency world a better respected place.
That will be a benefit to all, and those minority of agents that choose not to follow standards and cause grief to consumers or act fraudulently could be found out, with a better world for the agent who conforms to the rules.
A development of the NTSEAT idea could be a system of self-regulation under which the agent would have the opportunity to influence how that regulation would look.
This is not a case of getting the best deal for agents and blocking what the NTSEAT would be trying to achieve because the agents are paying, but establishing a sensible and practical regime reflecting how the industry works and what the consumer needs, and so would be workable for all.
There is however a major area of consideration which needs to be highlighted.
I expect many agents would be willing to pay a small amount to establish a level playing field on which all agents participate in a consistent way.
But those agents who are willing to pay will expect the less diligent (or downright dubious) agent to be pulled up and have action taken against them. I fear that no amount of rule setting and regulatory noise will be of value unless a compliance culture exists and most of all that enforcement activity by the regulator is robust and swift.
I think the NTSEAT concept should be supported.
At this stage the precise structure of that no doubt has to determined, but it should not be dismissed lightly, and subject to an impetus on enforcement I believe self-designed self-regulation in the property sector could avoid a heavy-handed government reaction to what it perhaps perceives as the ‘wild west’.
* Christopher Hamer was the Property Ombudsman until last November