Because housing policy in the UK has been devolved to the governments of each country, we are in a situation where England, Wales, Scotland and Northern Ireland have different rules on who can legally let and manage a property.
Leading the way is Wales, where mandatory landlord registration and licensing for those who let and manage properties was introduced in November 2015. All private landlords must register details of themselves and their properties with Rent Smart Wales and anyone letting and managing a property must apply for a licence and undergo training, either via Rent Smart Wales itself or with one of the scheme’s authorised providers https://www.rentsmart.gov.wales/en/faqs/enforcement/ . Although they do not yet have to join an approved professional body, those who are members of the UK Association of Letting Agents, ARLA or RICS do receive a discount on their licence fee.
While the penalties for non-compliance are not yet severe, they include: a fixed penalty of up to £250, rent repayment orders and criminal prosecution and fines (no amount specified). Unregistered and unlicensed landlords are also unable to serve valid Section 21 notices.
Scotland was the first country to introduce a register of landlords, in 2006. All private landlords must apply to their local council with details of themselves and their properties and the council makes checks to satisfy themselves that the applicant is a ‘fit and proper person’ to let property. If a landlord is found not to be registered, they can be fined up to £50,000 and banned from registering for up to five years.
While there used to be no requirement for those managing properties to register, they have always been encouraged to do so. However, at the end of January 2018 new legislation comes into force, meaning all letting and managing agents must sign up to the Letting Agent Code of Practice. They will have to:
- · be deemed a ‘fit and proper’ person
- · undergo training and secure qualifications
- · belong to a Client Money Protection (CMP) scheme, and
- · hold Professional indemnity insurance.
Registration opens on 31st January and the process must be completed by 30th September. The penalty for non-compliance is up to £50,000 and a potential 6 months in prison.
As such if you are using an agent in Scotland to let a property, do make sure they are abiding by the new rules.
Northern Ireland has had a national landlord and rented property register since February 2014 https://www.nidirect.gov.uk/articles/landlord-registration-scheme and the council can issue a fixed penalty of up to £500 for those found not to be registered, or prosecute them in court with a fine of up to £2,500. As it stands, letting agents are not required to be members of any scheme, so anyone is free to let and manage properties, although in 2017 the Department for Communities proposed introducing a regulatory framework for all letting agents, so legislation may not be far off.
England is somewhat behind the rest of the UK in the level of regulation, as anyone – landlord or agent – can currently let and manage a rental property. As long as they comply with health and safety requirements and all the other legislation that dictates how to legally let a property, they are not required by law to undergo any training, obtain qualifications or enter themselves onto any register, unless the property requires a license.
It is likely that legislation will come in later this year requiring all agents who collect rent to belong to a Client Money Protection Scheme, which will involve them satisfying insurance companies that they can meet their requirements. Agents who are members of ARLA or RICS are already required to hold CMP so, if your managing agent doesn’t already belong to one of these professional bodies, it may be worth considering moving to one who does or securing reassurance that they will abide by new rules.
Legal requirements to let and manage property
|England||None (bar licensing)||None, although some landlords/properties need to be licensed|
|Wales||The Regulation of Private Rented Housing (Wales) Order 2015||Landlords must be registered and both landlords and agents must apply for a licence with Rent Smart Wales, proving they have undergone training.|
|Scotland||The Letting Agent Code of Practice (Scotland) Regulations 2016||From 31st January 2018, agents must sign up to the Letting Agent Code of Practice, which obliges them to undergo training, belong to a Client Money Protection scheme and hold Professional Indemnity insurance. Since 2006, landlords have had to register with and be checked by their local council.|
|Northern Ireland||None||None, although landlords must be registered with the Landlord Registration Scheme.|
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