Mandatory qualifications for agents “within two or three years”

The mandatory qualifications expected of agents have not been forgotten and will come into effect in two or three years.

That’s the view of Mark Hayward, outgoing chief executive of the National Association of Estate Agents. He was a member of the Regulation of Property Agents (RoPA) working group which reported in summer 2019.

Addressing an industry webinar yesterday, Hayward - who says he is in touch with the government on a weekly basis - predicted that while the government is clearly pre-occupied with Coronavirus and Brexit, the RoPA findings are still important to the government and its Ministry of Housing, Communities and Local Government.

“It’s still very much on the agenda. It’s just the precise timing that’s the issue” Hayward told webinar attendees.  

“It’s something that the government wants to move forward, it’s got cross-party support so it will happening. It just needs primary legislation, and finding time for that is difficult” he continued.

In his update on progress on RoPA, Hayward said that some work had started on a code of practice for the agency industry under the leadership of Baroness Hayman; a steering group to consider a new code has been formed by the Royal Institution of Chartered Surveyors and The Property Ombudsman, with Propertymark, Safeagent, the Tenancy Deposit Scheme, the Association of Residential Managing Agents and the Property Redress Scheme also represented.

“The existing Property Ombudsman and NAEA Propertymark codes will be surrendered to the new industry regulator when that person’s appointed” said Hayward.

The outgoing NAEA chief executive said that he believed an announcement on the identity of a new regulator would be made within the next few months, with the legislation required to enact the formal qualifications and other recommendations taking “two to three years” in total. 

Hayward predicted - but could not speak on behalf of the government - that once progress was definitely underway, agents would probably get some two years in total to achieve the qualifications necessary. 

A number of industry training suppliers offer Level 3 and Level 4 qualifications which lie at the heart of the RoPA recommendations.

Here’s a reminder of the RoPA recommendations made some 15 months ago:

Scope of new regulation: “We recommend that all those carrying out property agency work be regulated (including auctioneers, rent-to-rent firms, property guardian providers, international property agents, and online agents)” but this regulation will not extend to property portals like Rightmove and Zoopla nor to the Airbnb-style short-let sector.

“However, we recommend that the legislation required to regulate property agents should allow for future extension to the scope of regulation (e.g. to include at a future point regulation of landlords, freeholders and developers – as well as retirement housing managers and Right to Manage companies).”

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The new regulator: “We do not consider that an existing body could take on the role of the new regulator. Therefore, Government should establish a new public body to undertake this role. The new regulator should be established and run with regard to general principles of good governance, including: independence, openness and transparency, accountability, integrity, clarity of purpose and effectiveness. The new regulator, through its board, should be accountable to the Secretary of State for Housing, Communities and Local Government. It should publish an annual report on its progress in raising standards of property agents, using agreed key performance indicators – including customer satisfaction …

“We recommend that the new regulator take over responsibility for the approval of property agent redress and client money protection schemes. The new regulator should have the power to appoint a single ombudsman for property agents, rather than competing redress schemes, if they believe this to be the best way of improving standards.”

“The new regulator should be able to consider complaints from all sources. Where solicitors, lawyers or other professionals have evidence of possible illegal agent behaviour, they should be obliged to present it to the new regulator.”

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Licensing: “To confirm appropriate qualifications and credentials, property agencies and qualifying agents should be required to hold and display a licence to practise from the new regulator. Before granting a licence, the new regulator should check that an agent has fulfilled its legal obligations (such as belonging to a redress scheme and submitting a copy of their annual audited accounts to the new regulator) – and that they have passed a fit-and-proper person test. We recommend that the new regulator should be able to vary licensing conditions as it sees fit and that it maintains accessible records of licensed property agents.”

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Codes of Practice: “Codes of practice set out clear standards of behaviour. The Government has already committed to requiring that letting agents adhere to a code of practice, and we recommend that all property agents be required to do so. There should be a single, high- level set of principles applicable to all property agents which is set in statute: the ‘overarching’ code. Then, underneath, ‘regulatory’ codes specific to various aspects of property agent practice, binding only on those providing these types of services.

“Key principles for the ‘overarching’ code should include that agents must act with honesty and integrity; ensure all staff are appropriately qualified; declare conflicts of interest; and have an effective complaints procedure in place. To develop and maintain the ‘regulatory’ codes, the new regulator should establish a working group for each sector of property agency to work up sector-specific detail.”

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Qualifications: “In the new regime, every property agency should be responsible for ensuring their staff are trained to the appropriate level and clear oversight arrangements are in place for junior staff. To ensure levels of qualification are appropriate yet proportionate, the working group recommend that licensed agents should be qualified to a minimum of level 3 of Ofqual’s Regulated Qualification Framework; company directors and managing agents should be qualified to a minimum of level 4 in most cases.”

The new regulator will be expected to develop a system of qualification quality control.

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Leasehold and freehold charges: “The new regulator should be given a statutory duty to ensure transparency of leaseholder and freeholder charges, and should work with the sector (property agents, developers and consumers) to draw up the detail of the regulatory codes to underpin this aim as it applies to property agents … We recommend that the new regulator takes over from the First-tier Tribunal the power to block a landlord’s chosen managing agent where the leaseholders have reasonably exercised a veto. We also recommend that the new regulator provides information on managing agent performance to allow landlord freeholders - and where relevant, leaseholders - to make an informed choice of managing agent.”

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Assurance and enforcement: “We recommend that the new regulator should have a range of options for enforcement action according to the seriousness of the infringement and how regularly it has occurred. These options should range from agreeing remedial actions and issuing warnings up to the revocation of licences and prosecutions for unlicensed practice.”

“The new regulator and other bodies (such as Trading Standards and redress schemes) will need to share information and work together effectively. There should be a system of flexible working between the new regulator and Trading Standards teams, and the new regulator should set out guidance clarifying their own and Trading Standards’ roles with regards to enforcement action to avoid duplication.”

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You can read the full RoPA report here.