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| Sam's Word |
As
I write, it is Hallowe'en. Strictly Come Dancing has just aired its
annual special and Eastender Jake Wood had an off night, while
Frankie and her partner Kevin scored a ten.
We
have had two trick or treaters at our (home) door last night, and we
were ready with the Quality Street.
So
no tricks were needed.
However,
there are certainly both tricks and treats in the world of estate
agency.
We're one of the treats. Edward Ashdale estate agents is now an established and
respected name since two like-minded businesses came together to
become Edward Ashdale and work across Lambeth and Bromley. We do good
things. Some are exceptional. Such as consistently accompanying people on
viewings. The safest thing to do and the best way for people to get
all of our expertise, all of the time. Such as consistently using
professional photography. We're trying to attract buyers to the homes
we sell for people and only the best will do.
There
are also the tricks, or tricksters, out there. In our latest
newsletter, I said that, “With property prices at strong levels the
opportunities for buy-to-let investment are scarce, so if you are
thinking about investing in property it’s more important than ever
to choose carefully so as to maximise the yield and chance of capital
growth. Properties with onerous maintenance and service charges are
always likely to impact on yield and capital growth, so fully
investigate any planned maintenance a building may have ahead. There
are certain property management companies that have to be avoided,
given their culture and practices. In an industry that is allowed to
operate unregulated a poor leasehold management company or freeholder
can make a Landlord’s investment a very unhappy experience.”
An
article (here) from 2007 by a disenchanted former estate agent went further.
He wrote before the
The Property Ombudsman (TPO) came into being, which was a welcome
development, though arguably even now one without enough legal teeth.
The
list of horrors the agent came up with included:
1. Gazumping. When a deal has been agreed some agents still show people around the property hoping for a better offer.
2. Value a property at a low price - and then sell it to a friend or colleague.
3. Use scare tactics such as pretending to receive offers to get people to make a higher offer.
4. Neglect to pass on all offers to vendor in hope of achieving a higher one later on.
5. Refuse to reduce commission if the price is reduced.
6. Overvalue houses to secure business from sellers.
7. Supply customers with fake documents to help them secure a mortgage.
8. Make up a very low offer. This shocks the seller into accepting a genuine offer which is far lower
than the original valuation.
9. Fake evidence that other properties in the area have sold for an overly high price.
10. Erect for sale/sold signs at homes the agent had nothing to do with to give a false impression.
Bringing
things up to date, this year the Property
Ombudsman reported a sharp increase in the number of consumer
complaints for the residential lettings sector, ahead of the
requirement that came into force on 1st October 2014 for every
letting agent to register with an approved redress scheme.
The Ombudsman upheld 74% of the complaints made by landlords and tenants against letting agents.
Christopher Hamer, the Property Ombudsman, explained, "Up until now there has been no legal requirement for any letting agent to register with a redress scheme, which has left thousands of tenants and landlords unable to access our free, fair and independent dispute resolution service. That is shown by the fact that around 20% of the initial consumer enquiries we received in this period related to lettings agents that were not signed up to TPO. I am pleased to note that the new legislation will change that and we've already seen nearly 1,000 firms register this year, making us the largest redress scheme with 11,744 lettings offices under my jurisdiction and following our Code of Practice, which sets out what service consumers should receive from member firms.
'The sharp increase in the number of lettings agents registering for redress with TPO, combined with TPO's increased profile and the ever-growing number of households renting goes some way to explain why we've seen such a significant increase in the number of lettings complaints, with more than half of our total enquiries now coming from landlords and tenants that feel they have been treated unfairly. The new legislation will make it an offence for any ‘rogue' agent that has not registered to trade and they will a face of up to £5,000."
Key highlights from TPO's latest Interim Report reveal that:
- Registered agents (p7): more than 4,000 additional agents registered with TPO, with sales and lettings representing the biggest growth areas. A total of 30, 128 agents registered with TPO across all jurisdictions – a 15% increase on the same period last year
- Consumer enquiries (p8): More than 8,474 consumers contacted TPO regarding a property dispute (a 4.6% increase on the same period last year). More than half of all the enquiries received were regarding lettings disputes with 4,759 enquiries logged (56.1% of all enquiries)
- Complaints (p9): Complaints grew by 37% overall with 1,187 cases reviewed, of which 721 were against letting agents (up 37%) and 544 were against sales agents (up 42%). The Ombudsman upheld 74% of all lettings complaints while 61% of all sales complaints were upheld
- Consumer
case studies (p10):
The Ombudsman hand-picked a selection of case studies to highlight
issues varying from death and inventories, owed rent, visas, pets,
ex partners, planning permission and fraud to share an insight into
the cases reviewed and awards given
What is The Property Ombudsman?
The Property Ombudsman (TPO) scheme offers an independent and impartial dispute resolution service to consumers who have been unable to resolve their disputes with a registered agent. The scheme was established in 1990. The Ombudsman can provide redress to place the consumer back in the position they were before the complaint arose, achieving a full and final settlement of the dispute and all claims made by either party. Where appropriate, the Ombudsman can make compensatory awards in individual cases up to a maximum of £25,000 for actual and quantifiable loss and/or for aggravation, distress and/or inconvenience caused by the actions of a registered agent.
TPO is free to all consumers. Agents pay a single annual subscription covering them for sales, lettings, commercial, international and auction activities. TPO does not charge case fees.
At 1 August 2014 over 13,200 sales offices and 11,600 letting offices were registered with TPO. The TPO estimates that these figures represent 95% of sales agents and 65% of lettings agents operating within the UK.
What does this mean?
Hopefully, that tenants and landlords will receive better treatment and experience less tricks in future.
I believe that everything that is done to improve the behaviour, practices and reputation of estate agents can only be a good thing.
Sam Samuel, MNAEA CRLM, November 2014
You can view our earlier posts in our Index here.
