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Partial Regulation Partially Begins

By D

We have previously commented (fairly negatively!) on the plans to introduce compulsory membership of redress schemes for lettings and property management agency work which appeared at the last minute in the Enterprise and Regulatory Reform Act 2013.

Slightly surprisingly (actually it isn’t, that was a rhetorical device) the government has, instead of producing the consultation that was promised on this issue, produced a draft Statutory Instrument which sets out the requirements for any organisation that is seeking approval as a redress scheme provider.

There is not a huge amount of useful information in the draft SI, unless you are considering applying to be a redress scheme of course! There are a series of requirements for the approval of a scheme which must be fulfilled and provision for the Secretary of State to give a notice if a scheme is rejected setting out the reasons why. It appears from the SI that the government does envisage one or more schemes being given the primacy of being “government administered”. This seems to echo the tenancy deposit protection situation where one scheme is the “official” scheme.

The draft SI also makes clear that any property management redress scheme is going to have to set its standards in accordance with one of the three codes of practice approved under s87, Leasehold Reform and Urban Development Act 1993. These are:

  1. The Rent Only Management Code;
  2. The Code of Management Practice for Private Retirement Housing;
  3. The Service Charge Residential Management Code.

There appears to be no compulsion on a scheme to have a code of practice for lettings agency work although they are mentioned and will, no doubt, be seen as important in granting approval.

It looks, therefore, as if the redress schemes will be moving ahead in the next year. We will now have to see who puts their hats into the ring to actually run one.

D is a solicitor specialising in landlord and tenant matters with a London firm.


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