The Importance of Creating a Strong Audit Trail
Over the last 2 years, we have conducted a significant number of audits. The audits are not finance related, the focus is on compliance on 2 levels - Compliance of the letting agency and compliance related to process and systems. Our desktop audits are conducted to ensure that GLM members are complying with membership criteria and relevant statutory requirements.
We have been asked by clients to audit their property portfolio to ensure compliance, to prepare for the sale of their business or to invest in other agencies; most recently we have been involved in auditing agencies being acquired.
National Trading Standards update Material Information
The National Trading Standards Estate and Letting Agency Team (NTSELAT) has produced new guidance for property agents to help you identify and disclose this information on residential property listings.
Material information is not a new requirement that our guidance is introducing, it is found in Regulation 6 of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs).
The CPRs made it a criminal offence for businesses (including estate and letting agents) to omit or hide “material information” that might change the transactional decision of an average consumer. Any information provided in a residential property listing must be accurate and truthful, not hidden, and not misleading. The “transactional decision” includes deciding to enquire further, to view, or to purchase/rent a property. The term “average consumer” refers to someone who is reasonably well informed, reasonably observant, and circumspect.
Renters’ Reform Bill - Committee Stage
Finally, the Government has provided some much needed information on the Renters Reform Bill. The Second Reading of the Bill took place late on a Monday evening, lasting 4 hours and was passed in the Commons on 23rd October 2023.
The Bill focuses on a range of reforms to achieve this, including abolishing the landlord’s ability to rely on Section 21; ending the use of assured shorthold tenancie (ASTs); creating a new register of PRS landlords'; introducing a property portal and establishing a Landlord Ombudsman for the Private Rented Sector to help tenants and landlords to resolve disputes.
Revised Guidance for Right to Checks
All landlords in England have a responsibility to prevent those without lawful immigration status from accessing the private rented sector. You do this by conducting right to rent checks on all prospective adult tenants before the start date of a tenancy agreement, to make sure the person is not disqualified from renting a property by reason of their immigration status.
This guidance provides information on how and when to conduct a right to rent check. You should also refer to the following documents:
Code of practice on right to rent: civil penalty scheme for landlords and their agents
Code of practice for landlords avoiding unlawful discrimination when conducting ‘right to rent’ checks in the private residential sector
Right to Rent Checks: A user guide for tenants and landlords
If you conduct the checks as set out in this guidance and the code of practice, you will have a statutory excuse against liability for a penalty in the event you are found to have rented to a person who is disqualified by reason of their immigration status.