Buy-to-let landlords in Scotland are being reminded that new rules have been introduced which affect the way letting agencies are able to conduct business on their behalf.
The Letting Agent Code of Practice was introduced on 31 January this year and all agencies are required to sign up to the new rules by the end of this week if they wish to continue operating in the sector.
From 1 October it will be a criminal offence for a company to conduct letting agency work if they are not on the register. Those breaking the rules could face a fine of up to £50,000 and up to six months imprisonment.
These rules are intended to increase professionalism in the sector and make sure that agents are properly able to handle money received from both tenants and landlords.
Landlords should check that their agency is registered and is compliant with these new rules.
Newton Property, a letting agency based in Scotland, is urging landlords to ask themselves three key questions to help ensure that rogue letting agents are not operating under the radar.
The questions are:
+ Has your letting agent applied to the ‘Scottish Lettings Agent Register’?
+ Is your letting agent compliant with the ‘Lettings Agent Code of Practice’?
+ Have all deposits been lodged with a secure tenancy deposit scheme?
Riccardo Giovanacci, letting director of Newton Property, said: “Transparency is imperative in the lettings sector. There is unfortunately an air of criminality amongst many operators as sadly we still hear of instances where safety and financial standards are being compromised.
“Fraud, money laundering and tax evasion is still rife amongst rogue letting agents, many of whom are also themselves landlords, despite measures being introduced to stamp this out.
“So, the biggest question for us is ‘how is this new legislation going to be enforced and policed once implemented’?”
Giovanacci believes that for too long now many letting agents have been operating in a sector that has been lacking minimum safety standards.
In the Glasgow area alone, his company has noticed a marked increase in the number of people posing as lettings agents over the past five to ten years.
He continued: “From our own market analysis, we are aware of well over a hundred agents and landlords in operation however, we believe that that figure could be much higher, with many operating under the radar.”
Newton fully welcomes the new registration which will offer reassurances that all agents have been vetted by the government, who will also store information on whether an agent has been refused or had their registration removed.
Possessing professional qualifications and having previous lettings experience is compulsory as part of this new registration process. However, Newton would question how many lettings agencies in operation would make the grade.
Giovanacci added: “This registration, if policed appropriately, is a step in the right direction however, we believe that legislation could go further to help stamp out rogue letting agents and improve the standards of Scotland’s lettings sector.
“If you feel your current agent isn’t fully transparent get in touch with the Association of Residential Letting Agents [ARLA] or an ARLA registered agent for professional advice. It will be a criminal offence to carry out letting agency work if you are not fully registered with the Scottish government’s new ‘Scottish Letting Agent Register’.”