It is a legal requirement for all lettings agents and property managers in England to belong to a Government approved redress scheme.
The Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014.
This order is linked with Part 6 Enterprise and Regulatory Reform Act 2013 as part of the Government proposals to improve standards in the private rented sector.
Who does it apply to?
The order applies to those involved in one of the two types of property work:-
- Letting agency work; and
- Property management work
If you are not clear whether the requirement applies in your individual circumstances, you should seek legal advice.
What is Letting Agency Work?
Lettings agency work is work by the agent in the course of a business in response to instructions from a private rented sector landlord who wants to find a tenant or a tenant who wants to find property in the private rented sector. Please look at the Government Guidance (pdf 217kb) for more advice on who this covers.
What is Property Management Work?
Property Management Work means things done by the person in a course of a business in response to instructions from another person who wants to arrange services, repairs, maintenance, improvement, or insurance or to deal with any other aspect of the management of residential premises. Please look at the Government Guidance (pdf 217kb) for more advice on who this covers.
What are the three approved schemes?
Failure to join the scheme
If an Agent does not join a Government approved redress scheme they can be subject to a £5,000 fine from the local authority and if they continue to breach their legal requirement to join such a scheme they can ultimately be closed down.