Introduction
The Property Redress Scheme has put together a FAQ guide to their scheme for letting and property management agents.
1. What is the Property Redress Scheme?
The Property Redress Scheme is a new Government-approved redress scheme, one of three, which it will be compulsory to join by the end of this year. The Property Redress Scheme is authorised by the Department for Communities and Local Government (DCLG) to offer redress to consumers (tenants, leaseholders and landlords) of letting and property management agents who are members of the Property Redress Scheme.
It has been developed by HF Resolution Ltd, a subsidiary of specialist insurance broker Hamilton Fraser, which has a long and successful track record in tenancy deposit protection and landlord insurance.
2. How is it structured?
The Property Redress Scheme has an Advisory Board and Sean Hooker, the Head of Redress (Ombudsman) has wide discretion to look at issues of fairness in the resolution of disputes.
3. What is the purpose of the Scheme?
The Scheme is designed to resolve or settle consumer complaints made against lettings and property management agents and, where appropriate, to make an award as a result of any financial loss, or unnecessary aggravation, distress and/or inconvenience caused by the member.
The Scheme is easy to use, free from red tape and designed to ensure full compliance, whatever the membership option.
4. What are its main features?
To widen its appeal and in order to offer agents a choice, we are offering the Scheme with a two-tier membership option: Entry and Enhanced.
The Entry model costs £95.00 (plus VAT) per application (head office) plus £95.00 (plus VAT) per branch. So, if you have a head office and two branches, for example, that will require three subscriptions (£285.00 plus VAT).
Subsequent complaint are charges as follows:
* £60.00 (plus VAT) for an Agent member who is a member of a body with client money protection
* £90.00 (plus VAT) for all others
The Enhanced model is an ‘all in’ model which costs £199 (plus VAT) and includes the annual fee and all complaints, subject to a fair usage policy.
5. How is fair usage defined?
The Property Redress Scheme can move a member from the Enhanced model to the Entry model if the number or types of complaints made against the member, in relation to the size and work they carry out, is excessive. This means the member will be required to pay the standard rate for any future complaints at the Entry rate for the rest of that subscription period. The same renewal terms may not then be offered to the Member on the Enhanced model.
6. What are the benefits of the Property Redress Scheme?
In addition to the full compliance and speedy resolution implicit in the Property Redress Scheme, members will not have to sign up to any trade organisations or adhere to a specific code of conduct. If you are not a member of a trade association or organisation then we will rely on standard industry practice when resolving a complaint. We can also help improve your internal complaints procedure and the process involved when dealing with a complaint, if required. The Property Redress Scheme will also look to offer discounts and special offers on other products agents and property professionals require such as professional indemnity insurance.
7. Who should join the Property Redress Scheme?
The Scheme’s primary focus is the small to medium-sized independent estate, lettings and property management agents, but we have designed it in such a way so it also appeals to sole practitioners, and to agents with multiple branch networks of up to 10, or above. We are also open to other property professionals such as company landlords, inventory clerks and also cleaners/decorators/gardeners.
8. What type of work does the Property Redress Scheme cover?
The Scheme covers lettings, property management and estate agents as follows:
A lettings agency is an agency which has been instructed by a landlord to find tenants for properties belonging to the landlord and to act on his behalf.
A property management agency is an agency which has been instructed by a landlord who wishes the agency to arrange services, repairs, maintenance, improvements or insurance, or to deal with any other aspect of the management of premises in England on the landlord’s behalf.
An estate agency is an agency which takes instructions from sellers of property and introduces buyers.
What happens if an agent does not join a consumer redress scheme?
The agent can be subject to a £5,000 fine from the council. The enforcement will then be undertaken in same way as if the council was enforcing a parking ticket, which can be through the magistrates’ court. If the agent still does not comply, the council can obtain an injunction to close the agent down.
9. What happens if Agent does not comply with the decision of an Ombudsman?
The Scheme can expel a member who does not comply with a decision. This means the agent cannot join another authorised scheme. The risk to the agent is that they are then subject to the £5,000 fine from the council and possible injunction to be closed down. The agent in this position must comply with the original decision to be allowed back into the scheme or to join another one.
10. What awards can be made by the Ombudsman?
In settling a complaint, the Ombudsman can make awards to the complainant that range from an apology, explanation, to reimbursement of financial loss, or a compensation sum for inconvenience and distress up to a maximum of £25,000.
Any compensation payment is calculated based on demonstrable loss or costs and will take into account any degree to which the complainant has contributed to the failure or loss suffered.
11. What happens if Agent does not comply with the decision of an Ombudsman?
The Scheme can expel a member who does not comply with a decision. This means the agent cannot join another authorised scheme. The risk to the agent is that they are then subject to the £5,000 fine from the council and possible injunction to be closed down. The agent in this position must comply with the original decision to be allowed back into the scheme or to join another one.
12. Where can I obtain more detailed information about the Property Redress Scheme?
Application forms and the Scheme’s Terms of Reference (the Scheme’s terms and conditions) are available by contacting info@theprs.co.uk.
We are currently working on guides and other documentation, but our holding website (www.theprs.co.uk) also gives a brief outline of how the Scheme works and the current pricing structure. The new website should be up and running from mid-August and this is also the time that all of our guides and documents will be ready, but we are able to accept inquiries and applications for membership immediately.