ARLA tells MPs that banned estate agents should not be allowed to work in lettings

ARLA boss David Cox has forcefully told MPs that it is wrong that a banned estate agent can legally be a letting agent.

He has also said that someone who is banned as a letting agent in the future must not be allowed to practise as an estate agent.

There is currently no legal mechanism for banning letting agents, but this is proposed under the Housing and Planning Bill currently going through Parliament.

Cox, giving evidence to the Bill’s committee, said that there needs to be ‘joined up’ thinking between the enforcers.

He said: “We have to factor in that sales agents can already be banned, and have been able to be since the Estate Agents Act 1979 came into force.

“We would like to see the lettings sector brought under the Estate Agents Act.

“We support the concept of banning orders, but against individual agents, as in the Estate Agents Act, rather than agencies.

“One thing we would not want to see is an individual agent – maybe a new recruit – who has done something very stupid which could shut down an entire agency, particularly as some of the large corporate agencies employ tens of thousands of people, so we think that banning orders should be based on individual agents.

“More importantly, however, at the moment the sales banning list is held by Powys County Council, by the national trading standards estate agency team, which bans sales agents, but at the moment still allows them to practise as letting agents.

“When these banning orders come into force we need to make sure there is joined-up work between whoever is the body that will be dealing with the banning orders for letting agents and landlords, and Powys’ national trading standards, so that we do not end up with a situation where somebody can be banned as a sales agent but still practise as a letting agent, or banned as a letting agent and still practise as a sales agent.

“We suggest either that the two come together as one overarching body, or that they speak very closely and regularly, to make sure that we do not end up with unintended consequences.”

Cox also told Kevin Hollinrake, one of the MPs on the committee and who is also the chairman of Hunters, that it was important to ban individuals, not businesses.

He said: “If you ban David Cox Lettings, for example, there is nothing stopping the company directors of David Cox lettings from setting it up again as David Cox Lettings and Property Management Ltd, at which point the agency has been banned but the agents are still trading. They could also go and work for another company. That is why we believe that it should be at the level of the individual agent.”

In further exchanges, Cox told Hollinrake that all letting agents should have client money protection, and that there should be much stronger enforcement of the industry.

He said: “Enforcement has been derisory over the past few years. The number of prosecutions is low and the actual awards made are awful and effectively nothing more than a cost of doing business for a lot of these criminal agents.”

He went on: ”One of my members in the east of England went down their high street when the Consumer Rights Act 2015 came into force with the fees elements. Of 23 agents, 19 were not displaying the necessary fees.

“At a £5,000 fixed penalty notice, that is £195,000 in on-the-spot fines that could be levied with very little work by a trading standards officer. If they had not got the fees on their website, which they probably had not, that was another £195,000. If local authorities were enforcing that, they could make hundreds of thousands of pounds for their department and start ridding the industry of the people we do not want in it.

Cox also called for the proposed database of banned and “rogue” letting agents to be a public document.

The Bill says the ‘blacklist’ would be available only to local authorities.

But Cox said that the database should at the very least be open to letting agents, tenants and landlords.

He said: “The sales agents database is an open database and has been for many years. Therefore we would like to see both the rogue agent database and the banned agent database being public. First, this would mean that tenants and landlords would be able to see whether their agent had been banned or blacklisted.

“Secondly, and I would say more importantly, it would mean that agents can also check the database when they are looking to recruit new staff.

“What has concerned agents since the discussion paper was launched earlier in the year is what would happen if they employ someone who has been banned. They cannot check the database under the proposals and under the Bill, and therefore they will have no idea. If it then subsequently comes out, it would damage their reputation through no fault of their own and with no ability to actually check.”

The full committee session is here

Originally posted here.

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