Ensuring that consumers with unresolved complaints have quick and easy access to independent, effective third-party dispute resolution is a challenge in any sector – but property throws up some unique challenges.
For one thing, it’s particularly unwieldy.
In fact, of all the sectors we operate in – including energy, communications, copyright and parking – none is as complex as property when it comes to the redress and dispute resolution landscape.
We recently published an infographic that highlighted the patchwork quilt of bodies, organisations and redress schemes that operate in the sector. There are more than 40 of them.
This fragmentation was the reason we decided to stop handling property complaints earlier this year. We didn’t want to be part of a broken system.
What consumers want
Consumers find complexity like that found in property redress difficult to navigate. The complexity causes stress, hassle and confusion – ultimately reducing trust and confidence in the sector.
All the feedback we’ve gathered points to the need for a simple and easy-to-understand complaints journey that offers swift, frictionless resolution.
If you were building a regulatory system in property that was simple, straightforward and cost-effective, it wouldn’t be the current model –something that I think everyone in the sector agrees with.
But what should it look like?
Beyond redress
There has been some discussion around whether a single ombudsman for property and housing is the correct approach for the sector.
Some have argued for a single ombudsman for social housing and a single ombudsman for the private sector.
Then there are those who see a single portal sitting above a range of ombudsman/alternative dispute resolution (ADR) schemes as the answer.
For me, the debate needs to be broadened beyond the redress piece of the puzzle.
In order to raise standards and build consumer trust and confidence in the sector, the discussion should focus on the entire regulatory landscape, of which redress is just one part.
At Ombudsman Services we think the system needs to be simplified, with some key building blocks put in place – standards, regulation, redress and consumer advocacy and advice. This then needs to be backed up by enforcement.
We are pleased that a new working group has been established by the Government tasked with helping to raise standards amongst property agents. A regulatory model will be a key part of that discussion and we are delighted to be part of that working group.
The energy example
There is currently a lot of interest from policymakers and the government in what’s called the ‘tripartite model’ in energy.
This three-pronged approach involves us as the sector’s single redress provider – the Energy Ombudsman – working closely with the regulator Ofgem and Citizens Advice as the statutory consumer advocacy body.
The three organisations come together to share complaints data and insights in order to spot trends and risk areas in a co-ordinated way. The key to this work is the agreed action that is jointly taken forward to raise standards in the sector.
There are, of course, significant challenges in energy – as evidenced by the recent collapses of both Extra Energy and Spark Energy.
But the tripartite model means that Ofgem, Citizens Advice and we at the Energy Ombudsman are all providing clear and consistent advice to consumers on what they need to do and there is a safety net in place for all the consumers of Extra Energy and Spark Energy.
Meanwhile, Ofgem is looking at tightening the rules for both existing suppliers and new market entrants in order to minimise the risk of other suppliers getting into difficulty.
The status quo isn’t good enough
Whatever the answer is for property, it’s clear that the status quo just isn’t good enough. It isn’t working for consumers or businesses.
In my mind, as a sector we need to work together to do the following:
- place consumers at the heart and design of what a regulatory landscape might be in property;
- simplify the regulatory landscape whilst ensuring that the key pillars of standards, regulation, redress, consumer advice and enforcement are in place;
- ensure within the regulatory landscape that roles and responsibilities are clear and that there is joined-up working;
- create public accountability, whereby the performance of each organisation within the regulatory framework is assessed. Merely producing an annual report or reporting to an internal board or committee isn’t sufficient; and
- get an ongoing commitment from organisations within the regulatory landscape to offer value for money, improve and modernise what they do, invest in technology and work to prevent consumer detriment in a pro-active way.
Only then will we be able to build consumers’ trust and confidence in the sector.
* David Pilling is head of lobbying and policy at Ombudsman Services
Sadly David, this is not a topic likely to raise an agents blood pressure unduly, hence the lack of replies, I suspect. I feel it deserves more attention if we are to improve our industry’s reputation
It is good to know that Ombudsman Services are part of a “new working group” to look into the matter of redress as a whole across the property sector, but I doubt this is being given much attention currently by our political masters. For my part, I was disappointed to see how long it has taken OS:property to suggest/provide an alternative model to work towards following its withdrawal from providing a redress scheme to estate agents.
Like others, particularly those with multiple offices, we were forced into the arms of The Property Ombudsman last August, whose fee structure (based on numbers of branches alone) is frankly both unappealing and unjustifiable, bearing little relationship to individual company’s exposure to claims, be it by overall turnover or claims history.
Incidentally, both NAEA and ARLA offered discounts of 12.5% to their members, but this “arrangement” was not recognised by TPO,and despite assurances from the heads of both organisations, the discount was not available.
I would suspect that TPO, in a near monopoly position, can now do a Rightmove and raise its rates without constraint.
However confidence in a redress system from consumers and subscribers is paramount so I look forward to the outcome of the working group.
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Firstly, I find it somewhat confusing that OS would cease participating in property redress ombudsman activity and then try to become an activist for change.
I don’t agree with the comments about TPO (and PRS) membership on a per branch basis. Why should a large corporate multi branch organisation effectively gain an unfair competitive advantage over small operators. It should be clear that premises where property management activity is undertaken then that location should be registered with an approved scheme. However, if OS are suggesting that the current model is not working then I would agree but the issue is not redress membership but the ability of rogue operators to hide under the radar and utilise various internet platforms to advertise private rented property and remain largely untouchable whilst providing potentially substandard or unregulated accommodation.
My view as a person with significant redress and enforcement experience, is that all property agents, managers and/or landlords should be required to be registered in such a way that identifies the responsible person/entity. Tenants need to be able to live in safe and suitable homes and where this does not happen then those responsible must be able to be held accountable and, where necessary, prevented form operating in the market.
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I understand Bodiam’s concern about large corporates deriving an advantage over small operators, hence my suggestion that any redress scheme fee structure should be based on that business’s turnover, or number of transactions.
TPO’s fee structure is patently unfair when my staff, some of whom rotate around our smaller village branches, are obviously the same staff as in 2 or even 3 branches; but I nonetheless have to pay additional fees to provide “cover” for the same risk. All redress claims (if any) come to the Directors, not my staff, reinforcing my view that it is the business and its size measured by its exposure to consumers that should be assessed for subscription charges, rather than an arbitrary measure based on the number of offices.
It seems a little odd that TPO should align itself to the likes of Rightmove with its fee structure, adding unjustifiably to the fixed costs of smaller local branches, which my agency seeks to maintain.
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