The Property Ombudsman scheme expels London Corporate Apartments following deposit dispute

Published on Monday, 22 May 2017.

Landlords and tenants are being warned that London Corporate Apartments Ltd (LCA) has been expelled from The Property Ombudsman (TPO) scheme for failing to pay an award following a rental deposit dispute.

The Property Ombudsman (TPO) scheme helps more than 16,000 consumers with their property disputes every year and the scheme's free, fair and impartial service is a genuine alternative to the small claims courts. TPO is the largest Government-approved property redress scheme, and the only scheme which operates its own Codes of Practice, which are approved by the Consumer Code Approval Scheme (CCAS). More than 95% of sales agents and 85% of lettings agents are signed up with TPO which uses its Codes to go above and beyond the law to protect consumers from unfair practices and raise industry standards by holding registered agents to account for their actions.

Every sales and lettings agent in England is required to register with a Government-approved redress scheme, which enables consumers to have their complaint reviewed independently in the event of a dispute arising that the consumer is unable to resolve with the agent directly.

LCA’s expulsion prevents the firm from registering with TPO for lettings or sales redress for a period of two years - and an agreement between all the existing redress schemes means that LCA will not be able to register for any form of redress until the award is paid. Redress registration is required for LCA to trade legally.

LCA’s expulsion follows a complaint concerning the return of a deposit at the end of a rental agreement. The complainant contacted TPO after they were unable to resolve the dispute with LCA.  The complainant disputed the deductions made from the deposit and also claimed that the agent had failed to return the deposit in a timely fashion.

Katrine Sporle, Property Ombudsman said:

“Agents that agree to join our scheme must offer consumers the highest safeguards. This agent failed to investigate the original complaint satisfactorily and did not provide any written evidence to contradict the claims made against them about the rental agreement and the disputed deposit deductions.”

The Ombudsman reviewed the complaint and found the agent fell short of the standards required. The Ombudsman instructed LCA to pay an award of £340 as full and final settlement.

LCA was expelled from TPO for breaching the terms of its registration when it failed to pay the award. TPO’s independent Disciplinary and Standards Committee  ruled that the agent will not be able to register for sales or lettings with TPO for a period of two years.

Katrine added: “Refusing to fully cooperate with a complaint does not make the issue go away. In this case, I had the rental agreement and other information from the complainant but no information from the agent.  I therefore decided that the complainant's version of events should be accepted and the complaint supported. By refusing to pay the award, the agent is now unable to trade and risks a fine from Trading Standards should they try to do so.”

If an agent is expelled from TPO for failing to pay an award, they are reported to Trading Standards and are at risk of a fine of up to £5,000 for each branch found to be breaking the law by trading without redress registration.

Landlords, tenants, buyers and sellers are urged to always:

  • Check their agent is registered with a Government-approved redress scheme – every sales and letting agent is legally required to register with an approved redress scheme. The Property Ombudsman is unable to review a sales or lettings dispute if the agent is not registered with TPO
  • Make sure their agent has protected a deposit with a recognised Tenancy Deposit Protection Scheme – the law requires tenancy deposits are held by a Government-backed scheme. Agents must provide details of the scheme and any associated registration details and a tenancy agreement should explain how the tenancy deposit will be dealt with at the end of a tenancy.

Commenting on the case, Gerry Fitzjohn, TPO Board Chairman, said:

“Every agent registered with TPO is obliged to comply with awards made by the Ombudsman and co-operate with investigations. LCA breached both fundamental requirements and, without redress registration, is now unable to trade legally.

“The vast majority of agents pay the award made by the Ombudsman so cases such as these are rare.  However this does highlight the important role our Disciplinary and Standards Committee plays in holding TPO agents to account.”

LCA was last known to be trading from Unit 107, 93-101 Greenfield Road, London E1 1EJ (Company Number: 08896663).  TPO has provided the complainant with guidance to seek payment of the award by alternative means, such as the small claims court.

TPO’s online member directory enables consumers to search for registered agents by town, city, postcode and trading name.

ENDS

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