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Complaints against agencies: Redress schemes

This content applies to England

Letting and property management agencies must belong to a government approved redress scheme which can provide an independent assessment of complaints against the agency.

Redress schemes

From 1 October 2014, any letting agency or property management agency that is not exempt must belong to a government-approved redress scheme.[1] The schemes are:

Estate agents must be members of a government authorised consumer redress scheme – see Problems with estate agents for more on redress schemes for estate agencies.

Each redress scheme has its own terms of reference, codes and procedures which should be referred to when making a complaint to the scheme about one of its members. See the essential links folder on the right hand side of this page for details of each scheme.

Each redress scheme can provide a list of its members on request.

In a case involving an agency registered with The Property Ombudsman only for its 'residential sales and lettings work' but not for its 'residential leasehold management work', the Upper Tribunal held that 'letting agency' and 'property management' were different types of work and that agencies engaged in both needed to ensure that they were covered by a redress scheme (or schemes) in respect of all the work they did.[2]

Duty to publicise membership of redress scheme

Agencies that are required to belong to a redress scheme must display and/or publish on their website:[3]

  • a list of fees
  • a statement indicating membership of a redress scheme
  • the name of the redress scheme belonged to.

Information about the chosen redress scheme should be provided when a lettings agency enters into an agreement with its customers. For more information on the duty to publicise fees, see Agency charges

Enforcement

Each local authority has the responsibility to enforce the requirement to be a member of a redress scheme on the agencies in its area and can impose a fine for non-compliance.[4]

The National Approved Letting Scheme (NALS) has produced an Effective Enforcement Toolkit with a step-by-step guide for local authorities on the legal process to follow when taking enforcement action against non-compliant agents.

Exemptions applying to letting agencies

There is no requirement for a letting agency to belong to a redress scheme if:[5]

  • the purpose of its work is only to facilitate a direct transaction between a prospective landlord and prospective tenant
  • the letting work is carried out by a local authority
  • the tenancy is offered by a housing association/private registered provider of social housing
  • the tenancy offered is a long lease
  • an employer arranges accommodation for an employee
  • the prospective tenant provides work or services to the person arranging the letting
  • lettings are arranged by an educational institution[6]
  • a letting is arranged by someone providing legal advice in connection with resolving a legal dispute.[7]

Exemptions applying to property management agencies

There is no requirement for a property management agency to belong to a redress scheme if:[8]

  • the management work relates to a hall of residence owned or managed by an educational institution or charity, and occupied wholly or mainly by students
  • the premises managed are used wholly or mainly to provide accommodation for people fleeing violence or abuse, on a non-commercial basis.

In addition, there is no requirement to belong to a redress scheme where property management work is carried out:[9]

  • at the request of a local authority or other social landlord
  • by a 'right to manage' (RTM) company, a local authority or a mortgage lender.

The First-tier Tribunal has held (in a non-binding decision) that a business ('R') which sublet properties which it had leased from a superior landlord - guaranteeing the superior landlord a certain rent and retaining the difference - was not required to belong to a redress scheme. The Tribunal agreed that any services, repairs, maintenance or improvements that R carried out, or insurance that R arranged at the sublet properties (the activities which generally define property management) was in consequence of its own obligations. Because such activities were not at the direction of a third party, they did not qualify as property management work for the purposes of the requirement to belong to a redress scheme.[10]

Scope of redress scheme

The redress schemes will investigate complaints against their members free of charge. The types of complaint, and the procedure for dealing with them, will be spelled out by each scheme. A complaint will not normally be investigated until the agent has been given a reasonable opportunity (up to eight weeks) to resolve it.

Examples of complaints that can be made against a lettings/property management agency include:

  • avoidable delays
  • failure to follow procedures to which the agent subscribes
  • rudeness
  • not explaining things
  • poor service or incompetence
  • use of hidden fees
  • charging and refusing to return a prohibited fee [11].

Complaints about tenancy deposits should be referred to the relevant tenancy deposit protection scheme or to the courts –  see Dispute resolution for more information.

Remedies

The redress scheme can require the agent to provide the following types of redress:[12]

  • the provision of an apology or explanation
  • compensation up to £25,000
  • other action deemed in the interest of the complainant as decided by the scheme.

Once the offer of redress has been accepted by the complainant, the agent must comply within a set time limit.

If the redress scheme's decision is rejected, the complainant will lose the right to the redress offered, but may still use other options such as taking legal action in court. Where an agency fails to comply with a redress scheme decision, the scheme may impose sanctions including a penalty fine or termination of its membership.

Wales

The information on this page applies only to England. Go to Shelter Cymru for information relating to Wales.

[1] Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014 SI 2014/2359.

[2] Newham LBC v Sampson Estates Ltd [2019] UKUT 110 (AAC).

[3] s.83 Consumer Rights Act 2015.

[4] Art 8 and Schedule to Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014 SI 2014/2359.

[5] s.83 Enterprise and Regulatory Reform Act 2013.

[6] as defined in para 5 Sch 1 Local Government Finance Act 1992.

[7] Art 3(b) Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014 SI 2014/2359.

[8] Art 6 Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014 SI 2014/2359.

[9] Art 6(11)-(12) Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014 SI 2014/2359.

[10] Ridgemoor Properties Ltd v Reading BC, First-tier Tribunal (General Regulatory Chamber) Appeal Ref: PR/2017/0014, 16 October 2017.

[11] p.8, Tenant Fees Act 2019: guidance for tenants, MHCLG, April 2019.

[12] Art 4(2) Redress Schemes for Lettings Agency Work and Property Management Work (Approval and Designation of Schemes) (England) Order 2013 SI 2013/3192.

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