March 2017 – Letting Agents Register & Code of Practice

Author: Mitchells Roberton
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Section 29 of the Housing (Scotland) Act 2014 requires the setting up of a mandatory register of letting agents and section 43 gave Scottish Ministers power to set out a code of practice about letting agency work.

The Letting Agent Registration (Scotland) Regulations 2016 specifies the information required for  mandatory register of letting agents and the Letting Agent Code of Practice (Scotland) Regulations 2016 now provides for the Code of Practice.

Neither the Register nor the Code of Practice will come into effect until 31 January 2018. But letting agents will need to be geared up before that as the following notes indicate.

First, who counts as doing “letting agency work” for these purposes? 

“Letting agency work” is defined in a fairly tortuous way in the 2014 Act (section 61). But, generally speaking, “letting agency work” means you either:

  • carry out work for a private landlord who wants to let their property out to a tenant, or
  • manage a property (including collecting rent, inspecting the property and arranging for repairs and maintenance) which is rented out to a tenant – or planned to be so.

Some examples where you probably won’t need to register 

  • If you only manage properties you own;
  • If you’re helping with the letting and management of a property that’s owned by a family member, you won’t usually be expected to register if you’re making no money from it (not charging a fee or being paid); it isn’t part of your business; and you only occasionally help out;
  • If you’re managing a family member’s property under a power of attorney; or
  • If you’re a solicitor who only prepares leases for your clients.

Letting Agent Registration Regulations 

Some of the key requirements as to the information that must be included in the Register (in addition to the name and address of the letting agent) are:

  • The trading name of a business (if different from their “legal name”); the letting agent registration number to help those using the public register to identify whether a particular agent is registered;
  • Information to enable Scottish Ministers to assess whether applicants are fit and proper persons;
  • Information so Scottish Ministers can assess whether applicants are complying with key requirements in the Letting Agent Code of Practice e.g. as to protection in relation to holding client money;
  • And the Regulations also set out training requirements for  those seeking to join the register of letting agents.

The Code of Practice 

  • The Code of Practice sets out the standards all those doing letting agency work must meet. It runs to 137 paragraphs structured to follow the lettings process – from taking instructions from a landlord, letting and managing the property to the ending of a tenancy (including any arrangements that follow).
  • In particular, it contains rules about having a dedicated client bank account; client money protection; and professional indemnity insurance.

Gearing up before January 2018

Applications for registration will not have to be submitted until 30 September 2018. But, before applying, letting agents will need to ensure that:

  • anyone in the business who needs certain qualifications has them;
  • the business meets the requirements of the Code of Practice;
  • staff understand and follow the Code of Practice;
  • client money is held in at least one separate and dedicated client bank account;
  • there is client money protection; and
  • there is professional indemnity insurance.

Note: This material is for information purposes only and does not constitute any form of advice or recommendation by us. You should not rely upon it in making any decisions or taking or refraining from taking any action. If you would like us to advise you on any of the matters covered in this material, please contact Euan David: efd@mitchells-roberton.co.uk

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