Does your letting agent belong to a valid redress scheme?

When a tenant paid his initial one month’s rent in addition to a tenancy deposit in exchange for the keys to his new rental property, he did not expect a few weeks after moving into the flat to be contacted by the landlord wanting to know where his money was.

When it materialised that the letting agent had had not passed on his deposit or initial rent payment to the landlord, the tenant issued a worthwhile compliant to The Property Ombudsman (TPO) which was upheld by the Ombudsman, who ordered the letting agency to pay the money owed to the landlord totalling more than £4,000, together with £250 compensation to the tenant.

However, to make matters worse, the London-based company failed to pay the award, despite the fact that TPO members are required to comply with any award and direction given by the Property Ombudsman and accepted by the complainants.

Failure to pay an award is a serious breach of an ombudsman’s terms of reference, and subsequently resulted in the agency’s expulsion from the residential agency ombudsman, which means that the company in question cannot legally trade as a letting agency, because as many of you will undoubtedly know, it is mandatory that all letting agents and property management agents register with one of three government-approved redress schemes.

But that is about to change.

From Monday 6th August, the Ombudsman Services will begin a managed withdrawal from the existing schemes it operates for surveyors, managing agents, estate agents and letting agents, which means that letting and sales agents will have to belong to one of the two remaining redress schemes – TPO or the Property Redress Scheme.

Although in most cases disputes are resolved without a formal referral, these government approved schemes provide fair and reasonable resolutions to disagreements between members of the public and property agents, ensuring that tenants and landlords have a straightforward option to hold their agents to account when required.

If letting agents registered with the Ombudsman Services fail to switch to one of the two remaining schemes, this will result in the prevention of access to free dispute resolution services, therefore meaning that the company will be trading illegally.

So if you use the service provided by a letting agent, you may wish to ask them which redress scheme they belongs to and, for your own peace of mind, check on the relevant website that the company is in fact a member.

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