Letting agencies can help to raise tenant awareness about companies breaking the law by demonstrating their own compliance, according to PayProp.
The lettings payment automation provider says spreading the word about industry rules and being seen to honour them will help raise industry standards.
In addition, if renters have a better understanding of the tell-tale signs to look out for, they can avoid non-compliant agencies.
An alarming level of non-compliant agencies
Recent research by London Trading Standards shows that a huge number of agencies in the capital have broken the law.
In the 15 months to June 2019, 46% of 1,922 firms inspected failed to comply with either the Consumer Rights Act or their obligation to join a redress scheme.
This led to £1.2 million in fines being issued as well as 14 criminal prosecutions for a range of offences.
“The number of London agencies that have failed to comply with their obligations is a cause for concern as the industry’s proportion of law-breakers is often described as a ‘minority’,” says Neil Cobbold, Chief Operating Officer of PayProp UK.
“It’s positive to see that Trading Standards is taking a proactive approach to enforcement. However, following the introduction of the Tenant Fees Act and compulsory Client Money Protection scheme membership earlier this year, there is now more regulation for them to police.”
“If everyone associated with the industry was equipped with the knowledge of what is required, we could avoid non-compliant agencies and improve industry standards as a whole,” he says.
Are tenants aware of what to look out for?
While Trading Standards’ efforts to identify rogue operators have succeeded in highlighting widespread abuse, the body needs help from the public, particularly consumers with first-hand experience.
However, many tenants may not be aware of what they need to look out for, including agency’s fees templates, CMP certificates and redress scheme memberships prominently displayed.
“Although the average renter will be aware of poor service when they come across it, they may not be aware of all the little things which could mean an agency is breaking the law,” continues Cobbold.
“That’s where the leading agencies can help by demonstrating to their customers how they are fully compliant and committed to transparency. This could have a knock-on effect of raising awareness among renters and landlords.”
Protecting the image of the industry is crucial
Although it only focused on the capital, Trading Standards’ compliance research could have negative implications for the reputation of letting agencies across the country.
“These statistics should act as a wakeup call for the industry to get their house in order and distance themselves from wrongdoing – more agencies are operating outside of the law than many people may have previously thought,” says Cobbold.
“At a time when the lettings sector is in the spotlight due to its growing size, the huge number of private renters and its political importance, agents must do everything they can to protect their public reputation.”
“This can be done by improving consumer knowledge of what agencies do and what is required of them, as well as operating professionally and transparently at all times,” he explains.
“This year’s new legislation combined with Trading Standards’ increased commitment to enforcement, can help to identify and punish more rogue operators.”
“This will leave the compliant agencies who prioritise customer service to reap the benefits of a growing and increasingly regulated market,” Cobbold concludes.
Notes to Editors
PayProp is an automated transactional and reconciliation platform for the residential property rental sector that is both easier to use and more powerful than existing solutions offered by banks and traditional software vendors.
PayProp was launched in 2004 and has quickly grown to become one of the largest processors of rental payments for the property management industry.
In the United Kingdom, PayProp is recognised as an Industry Supplier by ARLA Propertymark and sets the standard for speed and accuracy of payments, cost and payment status transparency, complete transactional control, and regulatory compliance.
PayProp is part of the Humanstate Group, an international company with subsidiaries in the United Kingdom, United States, Switzerland, Canada and South Africa.
For more information, visit: www.payprop.co.uk.
For media enquiries, please contact:
Carel Alberts (media)
Neil Cobbold (Chief Operating Officer)