January 2018 – Letting Agents Code

Author: Mitchells Roberton
Posted on:

The “Code” here is nothing to do with Da Vinci but is more prosaic.

On 31st January, the Letting Agent Code of Practice came into force. The Regulations (the Letting Agent Code of Practice (Scotland) Regulations 2016) include the 25-page Code as a schedule.

In outline:

The Code makes provisions about:

  • the standards of practice of persons who carry out letting agency work;
  • the handling of tenants’ and landlords’ money by those persons; and
  • the professional indemnity arrangements to be kept in place by those persons.

What is “letting agency work”?

  • In outline, “letting agency work” means things done by a person in the course of business with a view to another (unconnected) person taking on a lease or occupancy arrangement of a home or for the managing (e.g. collecting rent and making arrangements for repairs) of such a home.
  • The term “letting agency work” is defined in more detail in section 61 Housing (Scotland) Act 2014.
  • More generally, the 2014 Act:
    • made provision for the registration of letting agents (including a fit and proper person test);
    • created an offence of operating as a letting agent without being registered;
    • set out the process for handling disputes between letting agents and landlords or tenants;
    • and allowed the Scottish Ministers to provide for a letting agent code of practice by regulations. In particular, the 2016 Regulations now do that by way of introducing the new Code.

The policy behind the new Code

  • The Policy objectives behind the Code included:

“… a requirement for letting agents to hold professional indemnity insurance and to have client money protection insurance unless they have equivalent protection through another body or membership organisation. Client money protection is a distinct form of insurance that protects the money of landlords and tenants against theft or misappropriation by the owners of the letting agent whilst that money is in their custody or control.

Where a letting agent has failed to comply with the Code, has been notified of the breach, and has been given reasonable time to put things right, a tenant or landlord … may apply to the First-tier Tribunal for a determination. If the Tribunal decides the letting agent has failed to comply with the Code, it must issue a letting agent enforcement order setting out the steps that the letting agent must take to put things right.”

What sort of things does the new Code cover?

The things the new Code covers are:

  • Overarching standards of practice: engaging landlords; taking instructions; terms of business and ending the agreement.
  • Lettings: marketing and advertising; giving correct information to prospective tenants; charging fees; and tenancy deposits.
  • Management and maintenance: rent collection and carrying out repairs and maintenance.
  • Ending the tenancy: bringing the tenancy to an end; Inventory/check-out and tenancy deposits.
  • Communications and resolving complaints.
  • Handling landlords’ and tenants’ money, and insurance arrangements; debt recovery and professional indemnity arrangements.

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

Comments are closed.

Tags: , , ,