From the 31 January 2018 anyone undertaking residential letting agency work in Scotland must ensure that their service delivery is compliant with The Letting Agent Code of Practice (Scotland) Regulations 2016. The Code sets out the standards of practice which letting agents must meet, and includes specific requirements around how clients’ money should be handled. It also makes it compulsory for businesses to have Client Money Protection and Professional Indemnity Insurance.
To whom does the Code apply?
The Housing (Scotland) Act 2014 defines “letting agency work” as work which is:
- Undertaken on behalf of a private landlord who wants to let their property out to a tenant
- Undertaken to manage a property (including collecting rent, inspecting the property and arranging for repairs and maintenance) which is either currently or is intended to be rented out to a tenant.
The new code applies to “every person who carries out letting agency work” which means it could affect organisations and businesses which may not generally be considered as letting agents.
Alongside the Code, letting agents will be required to join a mandatory register of letting agents by the 30 September 2018. All those applying to be on the register will need to meet standards as laid out in a “fit and proper person test” with key individuals in a letting agency being required to have met a minimum level of training.
Failure to comply and operating as a non-registered letting agency will be a criminal offence and the courts could impose a maximum fine of up to £50,000 and prison sentences of up to 6 months for those convicted.
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