Update: Property managers advised to be code-compliant ahead of January 2018



Daryl Mcintosh

Daryl Mcintosh advises property managers to be well-prepared ahead of the introduction of new rules next year.

All solicitor firms and letting agents managing property in Scotland need to be aware of the Letting Agent Code of Practice being introduced by the Scottish government in January 2018. The code will be accompanied by a register of letting agents for which training is a prerequisite and those managing any property in Scotland who are not registered will be committing a criminal offence if they continue to practice.

While January 2018 sounds a long way off, the Code will require agents to make changes and train staff and that means preparation needs to start in offices across Scotland straight away.

Firstly, familiarise yourself with the requirements of the Code.

Standards of practice, fees, provision of information, communication and debt recovery are among the topics covered. To be fully compliant all agents must ensure they hold client money in a dedicated client account and agents must also belong to a Client Money Protection (CMP) scheme such as the NFOPP Regulation CMP Scheme. Solicitor firms with dedicated lettings teams will be covered by the Client Protection Fund, however, the firms who are operating their lettings business as a separate legal entity will have to ensure they are a member of a relevant CMP scheme.

The Code also creates a process for dealing with complaints via a First Tier Tribunal system which is expected to hear its first letting agent cases in December 2017. The current Private Rented Housing Panel (PRHP) and Home Owner Housing Panel (HOHP) will cease to exist from 1 December 2016 and will instead be called the Housing and Property Chamber and the Chamber will also sit within the newly created First Tier Tribunal.

The main purpose of the Code is to ensure the private rented sector in Scotland is professional and credible. Everyone who manages properties will need to hold a relevant SCQF Level 6 or above qualification. This standard of expertise and professionalism should provide greater peace of mind and security to both landlords and tenants alike.

Those who have a Level 6 or above qualification which they gained more than three years ago will need to be able to evidence that they have undergone recent training on stipulated areas.  This training needs to comprise 20 hours (15 formal and 5 informal) covering:

  • Legal obligations relating to letting agency work and the rights and responsibilities of tenants and landlords
  • Handling of tenants’ and landlords’ money
  • Arranging and managing a tenancy
  • Managing repairs and maintenance
  • Customer communications, complaints handling and equality issues.

Agents and solicitor firms with dedicated lettings teams now need to implement a realistic timetable to ensure they can meet the requirements.

ARLA (Association of Residential Letting Agents) have long campaigned for better regulation and higher standards across the lettings industry and has worked closely with the Scottish government to ensure the coming measures are practical, affordable and serve landlords, agents and tenants effectively and with January 2018 looming recommend that agents start preparing and are ready for regulation.

  • Daryl Mcintosh is the Association of Residential Letting Agents’ business development executive.