The Property Ombudsman has issued a reminder to all agents to ensure they have the correct redress membership to cover the work they undertake. This comes after a letting agent was issued with a £3,000 penalty by their Local Authority for not having redress membership to cover their Residential Leasehold Management work, despite being a member of The Property Ombudsman for Sales and Lettings.
Following a complaint from a tenant at a residentials block of flats, which the agent had managed for two years, the Local Authority discovered that the agents’ membership of TPO covered it for Sales and Lettings, Commercial Sales and Lettings and some Property Management, but not for Residential Leasehold Management, which would have required further cover. The authority took the view that the company was in breach of its legal obligations and issued a notice of intent.
The agent appealed to The First-tier Tribunal which concluded that there was insufficient evidence that the agent’s membership of TPO, in connection with property management, was inadequate to meet their obligations under the Order. The Local Authority then applied to the First-tier Tribunal for permission to appeal to the Upper Tribunal against the decision of the First-tier Tribunal in respect of the matter, which was refused.
The Authority then reviewed its application direct to the Upper Tribunal, which subsequently ruled there was ample evidence from which to determine the property management activities of the agent, and that it was a point of law that needed to be addressed and determined. The judge stated that “a company must be a member of a redress scheme for all works in which they are engaged, otherwise the whole process of a redress scheme is undermined”.
Property Ombudsman, Katrine Sporle, commented “Local authorities have a duty to act where agents fail to register with an approved redress scheme, or fail to have the correct membership. In this case, the agent believed they were covered for redress by their TPO membership for Sales and Lettings, and as a result did not receive the maximum fine of £5,000. However, this should act as a timely warning to all agents to ensure you have appropriate redress membership to cover the work you carry out”.
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NOTES TO EDITOR:
What is The Property Ombudsman?
The Property Ombudsman (TPO) scheme offers an independent and impartial dispute resolution service to consumers who have been unable to resolve their disputes with a registered agent. The scheme was established in 1990. The Ombudsman can provide redress to place the consumer back in the position they were before the complaint arose, achieving a full and final settlement of the dispute and all claims made by either party. Where appropriate, the Ombudsman can make compensatory awards in individual cases up to a maximum of £25,000 for actual and quantifiable loss and/or for aggravation, distress and/or inconvenience caused by the actions of a registered agent.
TPO is funded through membership subscriptions and case fees and is free to all consumers.
At 31 December 2018 over 15,897 sales offices and 14,746 letting offices were registered with TPO.
Whilst TPO charges registered agents an annual subscription, the Ombudsman is accountable to the TPO Board which is chaired by a member of the House of Lords and with the majority of its members being independent from the industry.
The Ombudsman is not a regulator and does not have the authority to take regulatory or legal action against a registered agent. However, registered agents can be referred to the TPO Compliance Committee, which has the power to expel agents from the scheme and/or report them to the appropriate authorities, with the power to ban agents from carrying out estate agency business.
The Ombudsman's Terms of Reference, Codes of Practice, Consumer Guides and other documents about the operation of the scheme are available on our website (www.tpos.co.uk), together with previous annual and interim reports, case summaries, further explanation of governance arrangements and a full list of registered agents.
For more information about TPO, please visit our website at www.tpos.co.uk