Letting Agents to be Licensed Wednesday, 6th May 2009

The Association of Residential Letting Agents (Arla) is introducing a licensing scheme for its UK members and a code of practice for letting agents.

In a separate measure, ministers were planning a registration scheme for private landlords in England and Wales.

The Arla scheme will mean the following:-

Hold a professional qualification relating to lettings
Take part in continuing professional development
Have professional indemnity insurance
Have plans in place to protect any money they are holding for clients
Have an annual independent audit carried out on clients' funds.
Under the scheme, if an Arla licensed agent went out of business, any money it owed to clients would be protected.

"Lettings agencies are going out of business and owing their landlord clients thousands of pounds, or even tens of thousands of pounds, in rent," said Peter Bolton-King, Arla's chief executive.

"So this offers protection to landlords in the worst-case scenario."

"For too long the rental sector has been seen as the black sheep of the property market, with a lack of regulation and a requirement for redress to protect the consumer when the agent's failings are to the financial detriment of that consumer," said Ruth Lilley, head of membership and professional development at Arla.

Tenants in England can expect:
A tenancy agreement
That deposits be held by a tenancy deposit scheme
That landlords should carry out repairs
That landlords should give notice of inspecting or entering a property
That rented properties should have a gas safety certificate
That they should not be harassed or illegally evicted

The National Association of Estate Agents plans to introduce its own licensing scheme later this year.

"This recent development will surely come as a wake-up call to anybody operating in the sector that is not part of a regulatory organisation and cannot demonstrate to the consumer that they meet industry standards in the operation of their business," said Caroline Pickering, who chairs NALS.

Landlords who did not keep their property in good condition could be struck off and have their licence revoked if property was not kept in good condition.

The paper said the reforms would be outlined in a Green Paper within 10 days.

Private landlords in Scotland are already required to register. However, last week, the charity Shelter Scotland said that rogue landlords were continuing to operate there three years after the scheme was introduced.