The number of awards that The Property Ombudsman ordered agents to pay last year broke the £1m mark for the first time.
In her annual report for last year, published today, TPO reveals that the total amount was £1.2m, up 51% from the previous year. The highest award was almost £22,000.
During 2016, a total of 14,218 enquiries were received by TPO from consumers seeking advice, and of these, 3,553 proceeded to become formal complaints, up 7.5% from 2015.
But despite the rise, the number of complaints represented only a tiny proportion of transactions in the industry – for example, there were 1,310 sales complaints resolved by TPO last year, equating to just 0.1% of all sales transactions completed during the year.
Ombudsman Katrine Sporle said: “It is evident that the vast majority of consumers are happy with their agent.”
A total of 1,997 formal complaints against letting agents were resolved – 76% of which were supported. Half (51%) were made by tenants and 45% by landlords. The highest award was £21,972 and the average was £531.
In sales, 1,310 complaints were resolved, of which 73% were supported by the Ombudsman. Most (61%) were made by sellers and 35% by buyers. The average sales award was £397.
There was a 6.1% increase in the number of sales agents last year, and a 7% rise in the number of letting agents in the scheme.
Sporle said that altogether, there were now 38,017 offices and departments following TPO’s codes of practice.
She said that while there had been a decrease in enquiries last year, there was a 27% rise in initial complaints in the first quarter of this year – predominantly from tenants.
The case of the highest award where the agent was ordered to pay £21,972 concerned an agent’s use of a third-party referencing firm.
This outsourced firm failed to verify the tenant’s identification, although it was the agent that paid the price.
TPO said outsourcing referencing was “common practice for many agents”. She went on: “This crucial and costly mistake could have prevented the tenancy from commencing, as well as the court action which ensued when the tenant failed to pay any rent after their first month.”
The top four causes of complaints against letting agents were: management; communication and record keeping; in-house complaints procedures; and referencing.
The top four complaints against sales agents were: communications and record keeping; marketing and advertising; instructions, terms of business, commission and termination; and in-house complaints handling
If the heading refers directly to The Property Ombudsman it’s not surprising. A complaint was made to our office via The Property Ombudsman who we were not members. We responded to emails and advised them to refer their client to the Property Redress Scheme.
When we recieved details of the complaint from the Property Redress Scheme (Some months later), a letter from the The Property Ombudsmen was enclosed addressed to the complainant. The letter stated The Property Ombudsmen “have been in contact with them (Our agency) on numerous occasions and they (Our agency) have not at any stage advised us and responded to us during this time”. We only recieved two emails (Months apart) and replied to both, the first on the same day, the second the morning after.
The great thing about emails… they are dated! So when a member of staff acting on behalf of The Property Ombudsmen flagrantly lies in this instance we have evidence to hand ready for the Trading Standards Authority.
I think The Property Ombudsmen has had a monopoly on the sector for far too long and instead of acting as an impartial party, find it easier to have an instant biast towards the complainant. Why look over the evidence when you can just blame the nasty agent!
To those using The Property Ombudsman I would strongly advise changing membership to another, ie The Property Redress scheme.
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Much like their report last year- most of these stats represent the mandatory uptake as well as growing awareness of rights. As such they mean little in terms of real insight.
As for their payout stats, this doesn’t surprise me either. We had a nightmare tenant file a complaint. TPOS, whilst ruling we had acted exactly as we should, still upheld the complaint and proceeded to award nearly x2.5 what the tenant had actually asked for. Having spoken to other agents we were not alone in this experience. What was more, they would not allow us to offset the charge against their substantial rent arrears. We then had to evict on behalf of LL and he now has to pursue T & Guarantors through the courts.
What are agents experiences with other redress schemes? Keen to switch if there are better/more fair offerings out there.
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I’m more concerned that TPOS knowingly allowed hundreds of agents to use the TPOS logo and brand of respectability, despite NOT belonging and knowing that they did not have ICO, AML registration and, in the case of the latter two, continue to do so in breach of its own rules of membership and, arguably, the law.
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Name and shame Chris?
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Prior to June 2016, no Purplebricks LPE (franchisee) had any form of redress membership yet Purplebricks were trading nationally via its LPEs’ using that logo.
In June, TPO confirmed it was mass registering LPEs but had come to a deal with PB to give consumers redress (despite this clearly being against TPO rules of membership and the law (all agents must have redress and LPEs are individual firms as confirmed by HMRC).
Furthermore, TPO are fully aware that the vast majority of LPEs have no legally required ICO or HMRC registration yet still allow them to trade using the badge of respectability and security that is the TPO.
NTSEAT were also aware of this situation as are ZOOPLA and Rightmove. The latter two make it clear that they run vigorous checks of all agents before allowing them to join and advertise. The former has chosen not to act at this time despite assurances to the contrary.
In essence, law-abiding agents are going through hoops and paying fees to ICO, HMRC, Rightmove, Zoopla and TPO, whilst other agents are being given a free and, arguably, illegal, ride.
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