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Letting agents will have to display whether they have CMP
This is the start of what could prove a landmark week for letting agents.
Today in Parliament there is due to be another tussle over fees and Client Money Protection.
Then on Friday, Sarah Teather’s Tenancies (Reform) Bill is due to have its second reading. It’s a piece of legislation backed by the Government and which, if passed, has major ramifications for the use of Section 21.
Today, the House of Lords is due to discuss the Consumer Rights Bill.
Labour will press for the Bill to make it an offence for agents to charge fees to tenants.
It will also, once again, press for mandatory client money protection.
The Government, however, appears to be heading off this latest challenge and has slipped in a surprise amendment to the Bill, which already requires agents to display all their fees charged to both landlords and tenants.
The new amendment will also require all letting and management agents to display whether the firm offers CMP.
The amendment seems to be a concession by housing minister Brandon Lewis.
It follows a campaign by SAFE agent, which recently wrote to Lewis asking for CMP to be made mandatory.
Lewis replied saying that he had “no plans at that time” to make CMP mandatory.
However, the new amendment appears to show he has at least listened to concerns from the industry.
The government amendment is far more likely to succeed than Labour’s attempts on banning fees and making CMP compulsory.
It will also be seen to hand those agents that do offer CMP –typically, by belonging to a membership body such as ARLA, NALS and RICS –what could be a major marketing advantage.
John Midgley, chair of the SAFE agent steering group, said: “We are delighted that the Government has made this common sense move and listened to our concerns on the need for financial protection for landlords and tenants.
“This is the first step in ensuring that being part of a CMP scheme is made a mandatory requirement.
“We understand the Government’s focus on taking action to ensure transparency and fairness of letting agents’ fees and charges which addresses the financial aspects of entering into a tenancy, but in order to offer real consumer protection for the whole process, agents should be part of a CMP scheme.
“This new move goes part way to addressing the situation.”
Last week, Labour shadow housing minister Emma Reynolds openly backed a Generation Rent campaign which asked consumers to support the Labour amendment to ban fees.
According to Seb Klier of Generation Rent: “We have been raising the gross unfairness of letting fees throughout the passage of the Bill, and now there is another chance for politicians to do something about it.
“As any renter will know, however pernicious an unclear or surprise fee is, the central issue remains the huge cost that fees impose on tenants, who have no other choice.
“Not only are these fees completely disproportionate to the services rendered, they are also charged to captured consumers. Renters cannot use their consumer power to bargain down fees when they are looking to rent, because they are stuck with the agent that comes with the property.
“We can’t continue to allow lettings agents to squeeze us. Let’s take this chance to finally end these exploitative fees.”
The surprise government amendment, which also makes it mandatory for agents to display which redress scheme they belong to, is http://www.publications.parliament.uk/pa/bills/lbill/2014-2015/0052/amend/su052-I-a.htm
http://www.propertyindustryeye.com/letting-agents-will-display-whether-cmp/
