Redress Scheme Requirement

    It is a legal requirement for all lettings agents and property managers in England to belong to a Government approved redress scheme.

    The Law

    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 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 two approved schemes?

    Property Redress Scheme
    The Property Ombudsman

    Failure to join the scheme

    A person undertaking lettings agency work or property management work without being part of a  Government approved redress scheme may be subject to a financial penalty of up to £5,000 and if they continue to breach their legal requirement to join such a scheme they can ultimately be closed down.

    The Council has published a statement of reasons that will be followed when deciding the amount of a penalty charge.  This statement can be found in The Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014

     

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