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Posted on August 27th 2015 by admin-movingin

ARLA calls for rogue letting agents to be banned from industry

ARLA has told the Government that it should make it a legal requirement for all letting agents to belong to a Client Money Protection scheme.

It has also told ministers that all letting agents should be professionally qualified and required to undertake Continuous Professional Development – and that rogue agents should be banned from the industry.

ARLA wants to see bans in place whereby prohibited sales agents cannot work in lettings.

Calling for a scheme similar to the London Rental Standard to be placed on the statute books, ARLA said that regulation would ensure fairness and “the removal of those agents who bring the industry into disrepute”.

The calls to action are made by ARLA in its official response to the Communities and Local Government consultation on its discussion paper, Tackling rogue landlords and improving the private rental sector.

The paper represents a landmark in the industry, the first time that the Government has proposed a mechanism for banning bad letting agents. Currently, only sales agents can be banned, under the Estate Agents Act.

In its notably robust response, ARLA backs the proposals – but goes a lot further.

It criticises the current low number of prosecutions for housing offences and says that the fines should be ring-fenced and pay for further enforcement.

It also calls for the Sentencing Guidelines Council to set judicial guidelines, with unlimited fines.

ARLA says that culpable individual letting agents rather than companies should be banned from trading, pointing out that if a firm is banned, there is nothing to stop its directors simply starting up a new company.

The body also says that rather than create a blacklist of rogue landlords and letting agents – as DCLG is proposing – it would be better to extend the Estate Agents Act 1979 to include letting agents and, potentially, landlords.

The ARLA response says: “Many letting agents are also sales agents and therefore regulated under the Estate Agents Act 1979. This presents us with an opportunity to remove the current situation where an estate agent can be banned from selling properties but is still legally allowed to undertake lettings activities.

“Should a blacklist and banning orders come into being, we would strongly urge the Government to ensure sufficient dialogue between the body responsible for administering the blacklist and any register of banning orders and Powys County Council in order to ensure both bodies are aware of new entrants on to either list and ensure that any individuals banned from one activity are also banned from the other.”

ARLA also calls for any blacklist to be made publicly available.

The discussion paper also proposes a regime of civil penalties imposed on landlords and agents.

ARLA says: “Fines currently issued by courts are very low and provide only a limited deterrent to criminal landlords.

“By way of an example, there has been a recent case where a property had no smoke alarms, no hot water and a cockroach infestation. The landlord only received a £350 fine, £324 in costs and a £35 victim surcharge. The landlord had failed to fully comply with the notice to improve the property and pled guilty by post. The landlord was receiving £750 a month in rent and the maximum penalty available to the court was fines totalling £20,000.

“In many cases criminal landlords are now accepting these low fines as another operating cost to their business. Fines of less than one month’s rent are not a sufficient deterrent.”

ARLA calls for £5,000 fines to be standard.

The consultation was launched on August 3 and closes today at 11.45am.