April 2016 Newsletter

Published on Monday, 20 June 2016.

April 2016 Newsletter

This edition throws the spotlight on several compliance issues and the legal
requirements for agents to display their redress membership, lettings fees, and
disclose whether they have CMP.

We've also included an 'Open Letter' from the CMA which featured in the news last week in case anyone missed it – a must-read for members. Please read, share and brief your colleagues accordingly.

Trading Standards crack down on agents

Members take note! Trading Standards fine agents for failing to
display their redress membership...

(Published April 2016) The Alternative Dispute Resolution for Consumer Disputes (Competent
Authorities and Information) Regulations 2015, known as the 'ADR Regulations',
officially came into force in October 2015, which made it a legal requirement
for businesses to:

• Advise complainants of their redress membership

• Display the contact details of their redress scheme and the new* 12 month
timescale for referring disputes

How do you display yours?

TPO has seen correspondence from Trading Standards where they are carrying spot
checks and imposing fines against agents failing to display their redress
membership either in the branch and/or on their website. We've published a
checklist to ensure you pass any visit from your local Trading Standards Office
with flying colours...

Member checklist:

• The new regulations state firms must display the name and contact details of
their ADR provider. Please ensure your TPO membership is stated in your contract
terms, along with a link to the scheme's website (www.tpos.co.uk)

• Trading Standards Offices have been looking at company websites so please
ensure TPO's name and website address is featured on your website so consumers
know where they can refer a complaint to:

TPO's Terms of Membership also state that members are required to:

• Prominently display the TPO logo in the window of every branch office

• Ensure TPO's logo features on the agent's marketing literature,
advertisements, letterheads and any terms of business/service contracts

• Make copies of TPO's latest Codes of PracticePractice and the TPO Consumer GuideConsumer Guide available in every office

Agent fines: recent press articles

Agents fined after not signing up to redress schemefined after not signing up to redress scheme

Letting agents facing action over failure to sign up to redress schemeagents facing action over failure to sign up to redress scheme

Trading Standards check 202 agencies' redress membershipsStandards check 202 agencies' redress memberships

Council's new powers to fine agents flouting redress schemesnew powers to fine agents flouting redress schemes

Would you pass a spot check? 90% of lettings agents fall foul of
the law

Agents urged to review how they disclose their fees – would your business pass a spot check?

(Published April 2016) Next month will mark the Consumer Rights Act's one year
'anniversary', which saw a new raft of legal requirements come into force for
letting agents to better safeguard consumers.

However, new research is emerging from a range of sources which suggests many letting
agents are breaching the legislation by failing to fully disclose details of
their fees and charges.

The introduction of the Consumer Rights Act last year made it a legal requirement
for every lettings agent to disclose their fees and charges on their websites
and prominently in all their offices where they deal face to face with

For any letting agents carrying out a last-minute spring clean in their branches,
there has never been a better time to review your online and printed literature
as one Council in Berkshire recently revealed 90 per cent of the letting agents
operating in its area were breaking the law by failing to disclose fees and
charges properly, and were at risk of hefty fines.

Many agents have been caught out by disclosing their fees but failing to publish the
VAT, or failing to make it clear where other fees may apply (and how those fees
are calculated).

Reading Trading Standards Officers carried out spot checks on their local high street
as the enforcement powers of this legislation sits with them, and as such they
can impose fines of up to £5,000 for any firm that falls short of the fee
disclosure requirements.

Find out more

The Committee of Advertising Practice (CAP) issued new guidance on this
topic at the end of last year to supplement a range of materials on their
website to help agents comply with the law.

The Competition and Markets Authority (CMA) document, 'Consumer protection law guidance for lettings professionals', is a must-read for every agent and covers this topic in detail, while their simple
two-page 'Key principles' principles' document is a great tool to train branch staff and marketing teams.

Government rethink on CMP - time to get organised

The latest developments in the House of Lords and a reminder of the current legislative requirements to disclose if you have CMP cover

(Published April 2016) This month saw the government accept a series of revised clauses on
Client Money Protection (CMP) in the Housing and Planning Bill.

The government has now agreed to carry out a full review of the existing
transparency legislation and CMP in May 2016. TPO Member news - April

While there is currently no legal requirement to have CMP, which insures client funds
and protects them from unlawful use or fraud, this development is widely regarded
as a huge step in the right direction as it gives the government new powers to
introduce mandatory CMP in the future.

This news is of huge significance for consumers and agents alike. 2016 might
just be the year that CMP finally becomes mandatory. That said, it's important
that members take note of the existing legislation that already makes it a
legal requirement for agents to disclose whether or not they have CMP cover.

CMP – are you in breach of the current law?

Did you know? The Consumer Rights Bill made it a legal requirement for every lettings agent in
England and Wales to publicise whether or not they are a member of a client money protection scheme.

DCLG published a guidance document in 2015 that clearly stated 'Letting agents
who are not members of a client money protection scheme must make this clear,
silence on this subject is a breach of the legislation.'

This is a game-changer for the industry and the DCLG guidance goes on to say
'this information should be prominently displayed in every office and on the

Enforcement action:

The legal requirement for letting agents to display whether they have CMP cover
is enforced by trading standards officers, which can fine the agent a civil
penalty of up to £5,000 (payable to the council) for each office where the
information is not published. There will also be a fine of up to £5,000 if the
information is not published on an agent's website.

How can I find out more about CMP cover?

CMP cover is available through a number of providers - agents can access cover
through their trade association or Lonsdale, which was one of the first
insurance brokers to offer CMP cover to agents that do not belong to a trade

TPO has an exclusive agreement with Lonsdale, which offers TPO members comprehensive
Professional Indemnity Insurance and Client Money Protection. Further
information on the PI + CMP scheme can be found by clicking here.

Next steps:

• Check your office and website: are you displaying your CMP cover?

• Disclose your CMP cover: the more you talk about CMP, the more informed
landlords and tenants will become so they can scrutinise rival agents that have
yet to sign up and are failing to protect client funds.

• Brief colleagues: If a consumer asks, does everyone know if your business has
CMP cover? Please make sure your staff are aware that CMP goes beyond deposit
protection – it offers additional safeguards and gives landlords with the peace
of mind that the rent collected by their agent is protected from fraud and
unlawful use. These press articles really highlight the nightmare scenario
tenants and landlords can face if their agent does not have CMP cover in place:

o Letting agents jailed for total of seven years after £400,000 theftsthefts

o Letting agency's mystery closure - man arrestedagency's mystery closure - man arrested

o Rogue letting agent jailed after taking rents, deposits and wagesletting agent jailed after taking rents, deposits and wages

o Letting agent may be jailed after clients paid rent into personal accountagent may be jailed after clients paid rent into personal account

o Letting agent jailed after leaving landlords out of pocketagent jailed after leaving landlords out of pocket

 Source: 'Improving the Private Rented Sector and Tackling Bad Practice: A Guide for Local
Authorities' (DCLG, March 2015)

Urgent CMA announcement for agents

TPO shares an 'Open letter' from the Competition & Markets Authority (CMA) about the competition law & property portals

To view a copy of the CMA letter - please click here to download.

(Published April 2016) TPO has been asked by the CMA to distribute a copy of
this letter to ensure member agents are aware that when an estate agent makes a
commercial decision about its choice of online property portals, the law
requires that it makes that decision without colluding with estate agents that
are its competitors.

The CMA letter highlights three important points concerning unlawful activity
in this respect, and the consequences for individuals and companies.

A press announcement was also issued by CMA which provides further information
and includes quotes from TPO and NFOPP on this issue. Please click here to view
a copy.

Press Information

For press and media enquiries please contact The Inhouse Way.