A Code of Practice in any industry is a very helpful tool for staff and clients to know the bas...
A Code of Practice in any industry is a very helpful tool for staff and clients to know the basic level expected in terms of the level of service a client can expect. The Code of Practice sets out the guidelines it expects its members or clients to comply with. They are usually complied by a governed body or professional association.
The Lettings Industry is not currently regulated so individual lettings agencies are not obliged to have a Code of Practice to follow. However this can lead to poor service and ambiguity between agent and landlord. Letting agents are increasingly becoming members of associations or schemes so as to show their clients or potential clients that they follow specific procedures and have specific responsibilities, which show good practice.
Two main associations are ARLA (Association of Residential Letting Agents) and NALS (National Approved Lettings Scheme) both of whom show landlords that the letting agency they are using or going to use are members of independent licensing. This means the letting agency has agreed to meet certain standards of service, agrees to have a complaints system in place that offers redress (this is via the TPO) and that their client money is protected. ARLA and NALS both have their own Code of Practice, which are listed on their websites to be easily accessible.
They also both work alongside TPO (The Property Ombudsman) who also has their Code of Practice listed on both ARLA and NALS website as well as their own. Letting agents who sign up for these memberships are agreeing to follow their Code of Practice.
The Code of Practice for TPO is used to make a very clear line to show the guidelines a Letting Agent and their staff should follow. In our own office we are all expected to read these regularly to keep informed about how we are to proceed with day-to-day tasks in lettings. Sometimes situations arise that where clarification may be needed as to how we proceed and reading through the TPO guidelines brings back into focus the end result needed and how to get there.
If there is no Code of Practice for a letting agent to follow then the agreement between landlord and agent can be more open to subject to interpretation issues. For example, a management agreement between a landlord and agent may routinely include the term stating the agent will collect rents from the tenant and pay to the landlord, however does not state the procedure the agent would follow should the tenant not pay rent for any reason. The Code of Practice for the TPO clarifies this point and explains it in further detail. It explains that the letting agent will;
- have procedures in place to notify both client and tenant in a timely manner, of rent that has become appreciably overdue and take suitable steps to notify rental warranty insurers as necessary.
- draw a client’s attention to a build up of serious rental arrears and should seek appropriate instructions from the client or his professional advisers.
In our own office we have made our own additions to the TPO guidelines, which we follow. An example of this is in the showing of a tenanted property, the TPO would allow a current tenant to show the property if previously agreed, whereas our office policy is that all viewings without fail, are accompanied by a member of our staff. It is not adapting the TPO Code of Practice but adding our own policies to it to make it work for us.
When we first joined the TPO five years ago we already had good policies in place, however reading of the Code of Practice at that time showed areas we needed to improve on. We went through all aspects of the letting process and compared it to the guidelines, which was a positive as it showed us we were mainly complying already. One area we focussed on improving was giving a prospective tenant a copy of the tenancy agreement to read through before the tenancy started. Before we joined the TPO this had not been thought about, so we had to decide how to implement the change. To do this we discussed the best time of the process to be for this and decided when we contacted the applicant to let them know referencing had been completed we would book the move-in day and time, at this point we would email the potential tenant with what to expect on the move-in appointment and attach a copy of the tenancy agreement asking them to read through carefully. As well as making our process more compliant this procedure also saves time on the actual move-in appointment, as the tenancy agreement is a long document to read through.
It is an industry where no two days are the same and often we say to landlords that no phone call is ever the same too. Whilst our agency is a franchise and we are lucky to have the back up of a legal team at the end of a telephone, there are agencies that do not have this recourse. The guidelines a Code of Practice can offer a back up support to staff and business owners as it is good practice to re-familiarise yourself with the terms especially if you have a situation where you are unsure how to proceed. Often reading the guidelines will clarify your position as agent, or the landlord’s position and help you decide how to go forward.
It does not have to be large issues where the Code of Practice can cover; it is used in every day practice as so many of the day-to-day tasks can have a rippled impact. The smallest of jobs such as taking down an applicant’s telephone number, which most people would see as irrelevant can be subject to data protection laws on how we process and use someone’s personal details. If this was not covered in a Code of Practice the client would not know what to expect and the staff would not know how to deal with it. A letting agent who follows a recognised Code of Practice and has an external procedure for redress is showing themselves to be transparent and compliant, which can give a greater peace of mind to the landlord.