The Enterprise and Regulatory Reform Act 2013 requires those involved in lettings agency work and/or property management work to be members of a redress scheme.
Lettings agency work is defined as things done by any person in the course of a business in response to instructions received from:
- a person seeking to find another person wishing to rent a dwelling-house in England under a domestic tenancy (a prospective landlord)
- a person seeking to find a dwelling-house in England to rent under a domestic tenancy (a prospective tenant)
A company which simply advertises property for rent and only passes the contact details of prospective landlords to prospective tenants (known as a tenant finding service) will not be required to join a redress scheme.
Joining a redress scheme
There are 3 redress schemes:
We are the 'enforcing authority' if those who must join a redress scheme have failed to do so. In these cases we may serve a 'penalty notice'.
If you do not agree with a penalty notice you have received, you may:
- make a written appeal within 28 days
- appeal to the first-tier tribunal, which is available after 28 days
The role of a redress scheme
A redress scheme:
- requires members to provide consumers with a copy of their internal complaints procedures and information about the redress scheme when signing any agreement, and at the point any formal complaint is received
- requires any complainant to contact the agent in the first instance to try and resolve the complaint before going to the scheme. If unsuccessful the scheme will consider the complaint and issue its decision accordingly
- has the power to award monetary penalties, require an apology or some other practical action. There are also powers to award payments for distress or a payment in recognition of the time and trouble taken to make the complaint
If a scheme member fails to comply with a decision of the scheme their membership can be suspended and then terminated.
They will only be able to rejoin the scheme after full payment of all penalties, compliance with the decision and repayment of the membership fee at double the standard amount for its class.