by Mark Johnston
Last year there were 7,641 complaints made about letting agents to the ombudsman, 26% more than in 2010 which saw 4,180 complaints made.
However, of these complaints only a mere 756 were taken on by the ombudsman as a formal case, but this too was an increase of 42% on 2010 figures.
The biggest single cause of lettings complaints was how firms handle their customers, followed by communications failure and lastly deposit disputes.
In a year that has seen continuing fraud and bad management which lead to many landlords and tenants losing their cash to businesses that often closed with out warning, the ombudsman has now called for the lettings industry to be urgently reformed and regulated. They believe that these agencies should be regulated in the same way as estate agents to protect tenants and landlords.
Letting agents are currently not obliged to register with a redress scheme, such as the property ombudsman, to resolve disputes. In 2011 only approximately 8,701 letting agents registered with the property ombudsman, which is an estimated 60% of the market.
Ian Potter, spokesman for the Association of Residential Letting Agents (ARLA), said he was disappointed with the rise in complaints, but added “it comes as very little surprise given there is no national regulations in place to stop rogue agents setting up shop and taking advantage of what is a fragile market”.
Since estate agents became obliged to register with a redress scheme in 2007, there has been a steady improvement in standards.
Many members of various industry bodies believe that if letting agents were compelled by law to register with a redress scheme standards across the lettings industry would improve in a similar way.
Laws governing estate agents such as, the estate agents act 1979 are more than 30 years old but experts believe that they could easily be refined to include all forms of tenancy, which would then enforce letting agents to conform to the official code of conduct laid out by the ombudsman and therefore give greater protection to landlords and tenants.
Christopher Hamer, of the property ombudsman has, in the absence of regulation, proposed the formation of an industry council to develop and promote overall standards with in the lettings industry.
This council would seek to ensure that consumers understand why they should avoid letting agents who refuse to follow a set of industry standards and who do not seek out membership of recognised industry bodies.
Consumer awareness is the key and some knowledgeable landlords already check if an agent has signed up to a redress scheme before they allow them to market their property. However, landlords who are new to letting will no doubt be attracted by lower fees and therefore not enquire what protection the agent can provide should problems occur later.
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