Law News

Will UK Follow Scotland’s Lead on Lettings Law?

Rose Jinks - December 7, 2017

The UK Government has the opportunity to make the biggest change to lettings law for a generation, which could significantly affect the rights of millions of tenants, according to online letting agent

The Conservative Party first announced that the private rental sector would become regulated in October 2017, following a speech by Sajid Javid, the Secretary of State for Communities and Local Government. This involves consideration as to whether to introduce a new regulatory body to handle managing and letting agents, to best protect and empower tenants.

The Government had previously taken steps to protect tenants with the introduction of redress schemes in 2013, which encouraged letting agents across the UK to join one of the three Government-approved organisations. However, the current lettings law has been widely condemned due to fundamental underlying problems; the tribunal system can be expensive, uncertain and intimidating for tenants, and agents who weren’t signed up to the schemes were only fined up to £5,000 when it became a legal requirement to be registered from October 2014.

The proposed changes to the sector will require all letting and managing agents to become members of a relevant professional body or organisation that has been approved by Government. Other measures to be considered include whether tenants should have a greater say over the appointment of managing agents, and making the system transparent so that tenants know what they are being charged for and why.

Danielle Cullen, the Managing Director of ClickTenant, says: “Greater regulation of the rental sector is something welcomed and long awaited.

“There has been growing scrutiny placed on tenants, landlords and letting agents in recent years. We welcome the changes, and a blanket regulation to the whole sector is the correct approach the Government should take. All parties deserve reassurance that they will be treated fairly throughout the process, no matter which agent they choose to use. The legislative process just needs to ensure that each party’s needs are properly considered.”

Will UK Follow Scotland's Lead on Lettings Law?

Will UK Follow Scotland’s Lead on Lettings Law?

She continues: “The property sales industry is based largely on the compliance of estate agents, and it’s about time we raise the bar for the lettings industry as a whole. We need to wipe out rogue letting agents who tend to give the rest of the industry a bad name. There are plenty of agents committed to providing a high quality service, but a more level field needs to be introduced, and trust put back into the public.”

There are predictions that the rest of the UK will introduce similar lettings law to Scotland, which includes following the Letting Agent Code of Practice and joining a Register of Letting Agents.

Applications to the Register of Letting Agents in Scotland will open in January 2018, with a deadline for all agents to comply by 30th September 2018. Failure to adhere to the law could lead to fines of up to £50,000 and prison sentences of up to six months for those convicted.

The Scottish Letting Agent Code of Practice sets out lettings standards, making it compulsory to offer Client Money Protection (CMP) and professional indemnity insurance, and specifies how client money should be handled.

The Register of Letting Agents ensures that agents have adequate training and must undergo mandatory updates to comply with legal obligations.

We have a round-up of the new lettings law in Scotland here.

Cullen comments on the Scottish plans: “The changes in Scotland are probably the greatest step forward in terms of protecting private tenants in the last ten years. The inclusion of fines or prison sentences show how serious Scotland is for protecting tenants, and it’s certainly a good deterrent to potential rogue agents operating in the area. We should be seriously considering implementing similar legislation across the rest of the UK, to ensure our system is as transparent as possible.

“The Government has now finished collecting evidence on whether a new regulatory model is needed for agents in the private rental sector. We look forward to seeing what changes will be made, and certainly welcome them if they’re going to mirror the Scottish system.”