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All Property Agents that carry out Estate, Lettings and Property Management Work, as defined by legislation, must join a government authorised consumer redress scheme.
The Property Redress Scheme is authorised by the National Trading Standards Estate Agency Team (formerly the Office of Fair Trading) to offer redress to consumers of Estate Agents under the Consumers, Estate Agents and Redress Act 2007.
The following is the legislative definition of Estate Agency Work:
"Estate Agency Work" means things done by any person in the course of a business (including a business in which he is employed) pursuant to instructions received from another person (in this section referred to as “the client”) who wishes to dispose of or acquire an interest in land
(a) for the purpose of, or with a view to, effecting the introduction to the client of a third person who wishes to acquire or, as the case may be, dispose of such an interest; and
(b) after such an introduction has been effected in the course of that business, for the purpose of securing the disposal or, as the case may be, the acquisition of that interest;
The Property Redress Scheme is authorised by the Department of Communities and Local Government to offer redress to consumers of Letting and Property Management Agents under the Enterprise and Regulatory Reform Act 2013.
The following are the legislative definitions of Lettings Agency and Property Management Work:
"Lettings Agency Work" means things done by any person in the course of a business in response to instructions received from:
(a) a person seeking to find another person wishing to rent a dwelling-house under a domestic tenancy and, having found such a person, to grant such a tenancy (a prospective landlord);
(b) a person seeking to find a dwelling-house in England to rent under a domestic tenancy and, having found such a dwelling-house, to obtain such a tenancy of it (a prospective tenant).
Exclusions: lettings agency work
(1) For the purposes of section 83 of the Act, “lettings agency work” does not include the things described in this article.
(2) “Lettings agency work” does not include things done by —
(a) the employer, where the prospective tenant is an employee;
(b) the person for whom the prospective tenant provides work or services, where the prospective tenant is a worker;
(c) the person for whom the prospective tenant provides work or services, where the prospective tenant is-
(i) an employee who provides work or services under the contract of employment to a person who is not the
prospective tenant’s employer; or
(ii) a worker who provides work or services under the worker’s contract to a person who is not a party to that contract;
(d) the hirer, where the prospective tenant is an agency worker;
(e) the person for whom the prospective tenant provides services under a contract for services.
(3) “Lettings agency work” does not include things done by —
(a) an institution within the meaning of paragraph 5 of Schedule 1 to the Local Government Finance Act 1992(1);
(b) an authorised person within the meaning of section 18 of the Legal Services Act 2007(2).
"Property Management Work" means things done by any person (A) in the course of a business in response to instructions received from another person (C) where:
(a) C wishes A to arrange services, repairs, maintenance, improvements or insurance or to deal with any other aspect of the management of premises on C’s behalf, and
(b) the premises consist of or include a dwelling-house let under a relevant tenancy.
However, “property management work” does not include—
(a) things done by a person who is a social landlord for the purposes of Schedule 2 to the Housing Act 1996;
(b) things of a description, or things done by a person of a description, specified for the purposes of this section in an order made by the Secretary of State.
“relevant tenancy” means—
(a) a tenancy which is an assured tenancy for the purposes of the Housing Act 1988;
(b) a tenancy which is a regulated tenancy for the purposes of the Rent Act 1977;
(c) a long lease other than one to which Part 2 of the Landlord and Tenant Act 1954 applies;
(d) a tenancy of a description specified for the purposes of this section in an order made by the Secretary of State.
An order under subsection (8)(d) may not provide for a tenancy to which Part 2 of the Landlord and Tenant Act 1954 applies to be a relevant tenancy.
“long lease” means a lease which is a long lease for the purposes of Chapter 1 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993 or which, in the case of a shared ownership lease (within the meaning given by section 7(7) of that Act), would be such a lease if the tenant’s total share (within the meaning given by that section) were 100 per cent.
If an Agent does not join a government authorised consumer redress scheme they can be subject to a £5,000 fine from the local authority and can be ultimately closed down if they continue to breach their legal requirement to join such a scheme.
After joining a scheme the Agent must comply with the scheme's Ombudsman decision as failure to do so may result in the Agent being removed from that scheme. This may then result in the Agent being unable to join another government authorised consumer redress scheme.
By joining the Property Redress Scheme, the Property Professional confirms they will comply with the decision of an Ombudsman if a complaint goes that far.
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Property Redress Scheme is approved by Government under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015
Please contact us on 0333 321 9418 for further details.