Estate and letting agents have had a few years of grappling with new laws and regulations. What is apparent going forward is that there doesn’t appear to be any let up any time soon.
In an effort to assist our property loving pals, we have put together this list of legal highlights for you.
If engaged in estate agency work, you must provide to the client before entering a contract:
- Details of fees, charges, and other forms of remuneration, and when they will be payable;
- Notice if you do not subscribe to a client money protection scheme;
- The name of the redress scheme of which they are a member (compulsory for agents);
- The meaning of certain phrases used in terms of business, such as “sole agency”, “sole selling rights” and “ready, willing and able purchaser”;
- The identity of the estate agent;
- The complaint’s handling policy; and
- The main characteristics of the services;
- Information on their right to cancel (where applicable).
Have a set of standard terms of business with your client
This clarifies your obligations towards your client. Ensure that this is reviewed annually.
The consumer rights regime in England and Wales offers very clear rights to those individuals not acting in a business capacity. This applies to estate and letting agents and affects many of your standard contracts including template tenancy agreements used by tenants of managed properties or your terms of business with a landlord. Protection against unfair terms may also available to non-consumers if terms of ‘standard’ rather than negotiated, but this is limited and based on reasonableness.
When a right to cancel is wrong!
If you are providing an assured tenancy agreement on a landlord’s behalf, distance-selling regulations allowing a 14 day ‘Right to Cancel’ should not be included in the AST (as residential landlord and tenant agreements are exempt from the rule). However, the regulations will apply to the letting and managing agent’s terms of business where the landlord is a consumer.
Anti-money laundering laws
These apply to estate agents and, following a change to regulation in 2017, estate agents must register with their supervisory authority, HMRC. There are also a number of obligations including the inclusion and maintenance of policies and procedures to prevent financial crime, procedures for the reporting of financial crime along with staff training on the subject.
Data Protection is for life, not just for May 2018
Estate agents tend to hold a great deal of data for many people. Perform a ‘data audit’ and map out how data comes in and out of the business. You can then review your existing policies and explore the GDPR obligations that apply to you.
For lettings agents specifically:
Consider if you need a Power of Attorney
This allows you to enter contracts on the landlord’s behalf. Without it, you may not be able enter enforceable contracts or effectively manage the property on the landlord’s behalf.
Provide the prescribed information when granting any tenancy
This includes a gas safety certificate, EPC and the latest version of the ‘How to Rent’ government guide. Failure to do this may impact the landlord’s ability to evict the tenant in future.
Landlord details must be shared with tenants.
It is a criminal offence for you to not disclose a landlord’s name and address within 21 days, if requested.
Changes to Fees: Following overwhelming support, the Tenant Fees Bill has already powered its way through Parliament and has now reached the House of Lords. It is anticipated to come into force next year and currently contains provisions that will prevent residential tenants from having to pay letting fees. It also seeks to cap tenancy deposits at no more than six weeks’ rent and holding deposits to one weeks’ rent. Failure to implement the changes may leave you with a civil offence under your belt and £5,000 fine for a “first breach”.