Cleaning up the rental sector

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Money Talk By Christopher Hamer The Property Ombudsman The number of complaints about lettings has risen recently

The past two years have seen the UK residential property market suffer one of the biggest collapses in living memory, with house prices in most areas down between 20% and 30% on their 2007 highs.

Significant numbers of estate agents have closed down and those that remain are faced with a sales market, which, while improving, remains challenging.

As a result, many agents, perhaps without the necessary experience or expertise, have been focusing more of their attention on lettings.

This has made the need to oversee the rental market even more important, which is where the Property Ombudsman scheme steps in.

Complaint levels

So what effect has the decline of the property market had on complaint levels against estate agents?

It is inevitable that I will see an increasing number of disputes from those who feel they have received a less than satisfactory service from a letting agent

The first three months of 2009 saw the number of complaints received by the Property Ombudsman in relation to house sales fall by a significant 38% from the previous quarter, no doubt due to the decreasing number of sales - and sales agents - overall.

However, lettings complaints from the UK public have risen significantly over the past 12 months, by about 26% from mid-2008 to the current period.

This followed an exceptional 200% rise in complaints over lettings during the whole of 2008, as more and more agents joined the Property Ombudsman scheme for rentals.

So with the rental market in better shape than its house sales cousin, it is inevitable that I will see an increasing number of disputes from those who feel they have received a less than satisfactory service from a letting agent.

Logo

The Property Ombudsman scheme enables members of the public to complain about the level of service they receive from an estate agent or letting agent who is a member of the ombudsman scheme.

The majority are members, although people should always check for the Property Ombudsman logo before beginning the house buying or letting process.

You might consider a complaint to the Property Ombudsman when an agent has:

<ul class="bulletList" ><li>Infringed your legal rights </li><li>Failed to follow the rules and obligations set for agents under the Property Ombudsman code of practice </li><li>Treated you unfairly </li><li>Been guilty of maladministration - including inefficiency or undue delay. </li></ul>

I can recommend that member agents pay compensation of up to £25,000 in any one case.

Any decision I make is binding on member agents if the complainant accepts. However, the complainant is free to reject my decision and pursue the matter in the courts if they wish.

In addition, I provide information on serious breaches of the code or serious unfair treatment to the Property Ombudsman Disciplinary and Standards Committee, which decides on action against member agents, including expulsion from the scheme in such cases, or if they do not comply with my decisions - which is rare, but does sometimes happen.

Christopher Hamer is the Property Ombudsman

Since October 2008, an estate agent who is not registered with an approved redress scheme such as the Property Ombudsman cannot legally undertake residential property sales, and those who ignore the law face a significant fine from trading standards officers, who are immediately made aware of any Ombudsman decision regarding expelled firms.

For example, two firms were expelled recently for failing to pay agreed awards to complainants, but they quickly fell into line and paid up. Subject to the Disciplinary and Standards Committee being satisfied with their conduct, they may be readmitted at some point in the future.

With the market in its current state, it is crucial that homebuyers and tenants know that the Ombudsman has the ability to enforce decisions and come down hard on bad practices.

Making a complaint

If you have a complaint about a sales or letting agent, complaint forms are available free to download from the Property Ombudsman website.

The purpose of the Property Ombudsman scheme is to make life easier for the public and ensure people do not suffer because of poor service from an estate agent or a letting agent

Once my office receives a complaint, the investigations team will contact the estate agent in question and request the relevant files. For this reason, it is vital that members of the public retain all their own documentation and provide it to me as well.

Only rarely will it be necessary for someone from my office to speak to the complainant directly. A case officer will normally carry out a formal review based on the documents from both sides.

That review provides me with the information I need to reach a proposed decision. All reviews and reporting remain confidential, so only the agent, complainant and myself will see them.

If the proposed decision supports all or part of the complaint, the estate agent has 14 days to accept the decision or make a representation detailing why they disagree.

The case review is then sent to the complainants, who have 28 days in which to accept the decision or make their own representation.

I will only reconsider at the representation stage if they can show that there was a significant factual error that would have had a material effect on the decision, or they can produce significant new evidence.

I will then make a final decision. After this, there is no avenue for appeal or further review of the complaint for either party within the scheme.

Overall, the purpose of the Property Ombudsman scheme is to make life easier for the public and ensure people do not suffer because of poor service from an estate agent or a letting agent.

It therefore plays a key role when a dispute arises in making house buying or letting a little less stressful, which matters even more when the market is suffering and agents are clamouring for business.

<i>The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.</i>