The Royal Institution of Chartered Surveyors and The Property Ombudsman are consulting on a new Draft Code of Practice for Residential Property Agents, which will cover estate agents in the UK and letting and managing agents in England only. It is important to note that the Welsh and Scottish Governments have already introduced legislation to regulate letting agents.

Earlier this month, it was revealed that property industry bodies have joined a new Code of Practice Steering Group to enact one of the Regulation of Property Agents (RoPA) report's key proposals.

Lord Best's report, published last summer, called for the industry to adopt a new industry code, as well as recommending mandatory qualifications and licensing for agents and the formation of a new regulator. The new group marks the first step in implementing this.

Who are the Steering Group?

The Steering Group has been formed by the Royal Institution of Chartered Surveyors (RICS) and The Property Ombudsman (TPO). Its task is to create an all-embracing Code of Practice for residential estate and letting agents, with the ultimate aim of improving standards to protect consumers.

A wide range of industry organisations have joined, including ARLA and NAEA Propertymark, Safeagent, the Tenancy Deposit Scheme, the Association of Residential Managing Agents and the Property Redress Scheme. It also includes representatives from the Ministry of Housing, Communities and Local Government, as well as a leading Trading Standards officer.

Chairing the Steering Group is Labour peer Baroness Diane Hayter who has plenty of previous experience. She served as Chair of the Legal Services Consumer Panel, Vice Chair of the Financial Services Consumer Panel, a member of the National Consumer Council and chair of the Property Standards Board.

The Steering Group is being described as independent and all those taking part are doing so on a voluntary basis, indicating that the group is committed to creating a better regulatory system for both agents and consumers. The group includes many industry figureheads and organisations with experience of the agency sector. Hopefully, this means that the Code of Practice will take into account the needs, challenges, requirements and responsibilities of agents on the ground.

Why introduce the Code?

The Code is likely to be welcomed by most in the industry. The objective of the Code of Practice is to set out the principles that underpin the standards of professionalism including conduct and competence that a future Regulator and the public should expect of residential property agents. This will address both firms and individuals. With a single Code in place, consumers will have more power to hold agents to account.

The setting up of a Steering Group brings regulation back to the top of the agenda and serves as a reminder to everyone in the industry that agents must continue to support transparency and education.

What will the Code include?

The Code of Practice is expected to cover all aspects of residential property. It will contain a set of high-level principles followed by detailed chapters covering the various types of agency, including sales, lettings and management. It has since been revealed that the Code will include two sections: 'Dealing with Consumers' and 'Managing Businesses and Staff'.

It will address issues such as fair treatment of consumers, respect for diversity, training and development, conflicts of interest, complaints, handling of client money and data protection.

Currently, TPO and RICS publish their respective Sales and Lettings Codes and The Blue Book. The new Code of Practice will draw upon both of these widely-used guides with input from the supporting partners. It will also incorporate other existing materials such as the Residential Service Charge Code, which is already endorsed by the Secretary of State.

When the Code of Practice comes into force, it is expected that agents will be held accountable through a mandatory licensing regime overseen by the new regulator.

Make sure you have your say!

The Code of Practice is now open for consultation, with feedback sought from professionals, buyers, sellers, lenders, tenants and landlords. As this is the Code that will govern the way agents do business in the future, we encourage anyone with an interest in residential property to respond!

The consultation will remain open for 2 months, closing on Friday 04 September 2020.

The RoPA Code Steering Group will review the responses at the end of the consultation and these will be fed into the final version of the comprehensive Code.

You can read it and respond to the consultation here.

Should you have any questions in relation to the above, then please do not hesitate to contact Susan Fox, Senior Litigation Executive, on susan@kdllaw.com or 01435 897 297.

Disclaimer

This legal update is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of KDL Law or by KDL Law as a whole.

If you have received this update in error or wish to unsubscribe from future updates then please email us at info@kdllaw.com.