Landlords and Tenants are Behind Most Complaints to Redress Scheme

The Property Redress Scheme (PRS) has said that the great majority (85%) of the complaints it has seen in the last year originate from landlords and tenants.

By law, property agents are required to join a government authorised consumer redress scheme. The purpose of this is to give consumers of the property agent an escalated complaints procedure if they are unhappy with how their complaint has been dealt with by the agent.

Just over half (51%) of complaints originated from tenants. Landlords were behind just over a third (35%) of complaints, 8% were from leaseholders, 3% from buyers and 1% from sellers.

According to the PRS annual report, the most common complaints were about property management, which accounted for 29% of all complaints lodged. Meanwhile, complaints about deposits accounted for 27% of complaints received and problems with rent accounted for 15% of all complaints lodged with the PRS. Service and fees both resulted in 6% of complaints.

Big surge in complaints over property management and deposits

The figures show that PRS received 40% more complaints during 2016 than it had the previous year. The increase comes as landlords have been hit with an additional 3% stamp duty on rental properties, in addition to new tax rules which ban them from offsetting mortgage interest from their tax bill.

Ajay Jagota, a housing campaigner, said: “Some landlords will be squeezed because of recent tax changes, and they will be looking to generate extra revenue wherever they can.”

Sean Hooker, head of redress at the PRS, said that while the surge in the number of complaints can in part be attributed to the overall growth of the scheme, he thinks it also suggests a growing awareness among consumers about the complaint process.

Mr Hooker said: “Although formal complaints have risen, so too has the number of complaints resolved at the early stages of our process. Around 40% of our cases are resolved at recommendation stage and 99% are dealt with in less than 90 days from receiving the initial complaint through to a decision.”

He added: “We continuously look at improvement and initiatives to increase the effectiveness and delivery of our service. We hope that the most recent introduction of our online complaint system will further reduce the average time to complaint resolution.”

Property Redress Scheme membership up by a third

Property Redress Scheme membership rose by 33% in the year from 2015 to 2016.

Total Property Redress Scheme membership currently stands at more than 7,000, with almost 700 UK Association of Letting Agents (UKALA) members now having access to Property Redress Scheme membership.

At the end of 2016, a total of 5,259 agent offices (31% sales and 79% lettings) had Property Redress Scheme membership, with a further 227 property professionals choosing to join the scheme to promote best practice within their organisations.

Penalty issued to agent for failure to belong to redress scheme

Earlier this year, a judge dismissed a letting agents’ appeal against the £5,000 imposed on them by a local authority for failing to list their fees, as required under the Consumer Rights Act 2015.

The judge also awarded costs of £2,700 against London Corporate Apartments Ltd to pay for Tower Hamlets Council’s defence of the case.

The council has also issued a penalty of £5,000 against the letting agent for failure to belong to a property redress scheme as required under the Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014.

London Corporate Apartments Ltd has appealed.

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