Property News > Reminder issued by property ombudsman after agent fined by local council

Reminder issued by property ombudsman after agent fined by local council

All agents have been issued with a reminder from the Property Ombudsman to ensure all work undertaken is covered by their redress membership.

The warning comes after a lettings agent was fined £3,000 by their local authority as their residential leasehold management work was not covered by their redress membership, despite being a member of The Property Ombudsman for Sales and Lettings.

Concerns had been raised by a tenant at a residential block of flats, which had been managed by the agent for two years, and following investigation the local authority discovered that the membership held by the agent covered it for sales and lettings, commercial sales and lettings and some types of property management, but not for residential leasehold management, which would have required additional cover.

Following the investigation, the company was found to be in breach of its legal obligations, and was subsequently issued with a notice of intent by the local authority. 

The agent contested the notice, taking its appeal to the first-tier tribunal. There, the conclusion reached was that the evidence was insufficient to suggest that the membership of TPO held by the agent was inadequate. The local authority’s right to appeal the decision was then also refused by the first-tier tribunal.

The authority then took its application direct to the upper tribunal, and there it was decided that there was in fact sufficient evidence that could allow for the property management activities of the agent to be assessed, and that this should be addressed and determined. 

Finally, the judge concluded that “a company must be a member of a redress scheme for all works in which they are engaged, otherwise the whole process of a redress scheme is undermined”

‘Local Authorities have a duty to act where agents fail to register with an approved redress scheme, or fail to have the correct membership,’ said Property Ombudsman, Katrine Sporle.

‘In this case, the agent believed they were covered for redress by their TPO membership for Sales and Lettings, and as a result did not receive the maximum fine of £5,000,’ she explained.

‘However, this should act as a timely warning to all agents to ensure you have appropriate redress membership to cover the work you carry out,’ she added.

Related Articles

Landlords urged to get behind repossession court case

Private sector landlords are being encouraged to support a legal case which would protect their rights when it comes to repossessing their properties. The call from the Residential Landlords Association (RLA) ...
View >>

The number of house sales registered across England and Wales topped 90,000 in July

The Land Registry in England and Wales submitted more than 90,000 sales for registration in July, official figures show. 72,327 of the submissions were for freeholds, an increase of 0.7% on ...
View >>

Changes to stamp duty could be introduced, the UK Chancellor has hinted

Chancellor Sajid Javid has hinted that a change in stamp duty could be in the offing this autumn, but stopped short of saying that moving property tax to sellers would ...
View >>

Need Help?

Thank you. We will give you a call back as soon as possible!
Name *
Email *
Phone *
When would you like a callback? *