With more regulations controlling the sector than ever before, the concept of adding “another level of control should be rejected, but it hasn’t been”, according to David Beaumont, managing director at Compliance Matters.
The Ministry of Housing, Communities and Local Government (MHCLG) may have released a report of recommendations of the Regulation of Property Agents Working Group (RoPA), designed to raise professional standards in the industry, but Beaumont is surprised that no organisation opposed it.
Agents were told that the working group’s announcement is good news for raising professional standards in the industry, but Beaumont points out that “many agency businesses did not support” the concept, nor were they consulted.
“I know this is true because I assist and work with many agents to ensure they are compliant and many voiced concerns,” he said. “Surely, someone should have been standing up to voice those agents concerns, if not strongly oppose it.”
The MHCLG says that ‘the focus is to get all practicing agents on the path to qualification and comply with the regulations’, but Beaumont hopes that the proposal “will melt away”.
He continued: “It is a complete waste of agents time and money for little consumer benefit. At worst it will be a complete disaster; at best it will be a very slight improvement in standards.
“Think back and you will remember that there was no opposition from any of the so-called agency representation organisations [such as Propertymark and RICS]. In fact, there was blanket support for RoPA from them all. They were all onboard with it from the start and got involved with it right at the centre.”
Given that Beaumont runs a property professional compliance business, it may appear somewhat surprising that he appears to oppose the tightening of standards within agency – well, he doesn’t.
“I am not opposed to that [the tightening of regulations],” he said. “What I am opposed to is RoPA, because it will not be what it appears to be!”
He went on: “As I have said we have more regulators than ever in the sector, but there is less and less ‘enforcement’ across the board from local authorities. Mainly because of government cut-backs, funding restrictions and importantly because local authorities do not place agency legislation enforcement high on their consumer protection priority list. That will not miraculously change due to ROPA!”
Beaumont has considered the impact that the all the main organisations have on the industry, including Trading Standards, NTSELAT, Environment Health, Planning Departments, Housing Departments, three Deposit Protection Schemes, HMRC (money laundering), HMRC (absent landlords), The Competition & Markets Authority, TPOS, PRS, Immigration Department, six CMP Schemes, HSE, and Advertising Standards Authority.
In Beaumont’s view there is a general lack of enforcement results in poor compliance. This, he suggests, is illustrated clearly and simply when you look at money laundering enforcement.
He added: “Prior to HMRC taking it on compliance was non-existent. Now compliance is every agent’s highest priority. Why? Because HMRC have a pro-active enforcement policy. They visit agents and issue penalties, some very large! It’s not rocket science.
“The introduction of a new regulator with new codes of practice will not change the level of enforcement. There is no doubt about that. The enforcement agencies do not have the means or the incentive to increase enforcement. New funding will not miraculously appear for any of these agencies and so compliance will not improve.
“I might be wrong. Improved enforcement might happen? The new Regulator might end up with enforcement powers and thus employ officers to go out and enforce. Where will the money come from to finance enforcement? Your licence fee, of course. So, it will be significant to say the least, not to mention the training and qualification fees that will be required!”
Entirely agree. Passing the buck when it comes to compliance has been a feature of our industry for too long.
Neither consumers nor agents are clear as to governance from the wide range of supposedly regulatory bodies that David lists.
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I thought one of the benefits of ROPA was to reduce the number of toothless regulators and replace them with one publicly funded regulator?
It’s strange that David is criticising a regulator that hasn’t yet been created and then in the same breath assume, and it is only an assumption, that any new regulator will not have any funding or appetite for enforcement.
David (or whoever) should be criticising the lack of progress of ROPA, ie when will it be fully implemented. This is the real problem.
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If you actually read the RoPA report you would discover that the one thing RoPA does not do is create “one public funded regulator”. Whilst the government might “seed” the regulator it would be paid for by the industry via licensing (not the tax payer).
Section R of the Executive Summary states: “The new regulator should be funded by the firms and individuals it regulates – but Government should provide ‘seed corn’ funding to support its creation and help with its operation for an initial period.”
What’s more the regulator themselves would not have any teeth but would rely upon the current Ombudsman and Trading Standards teams.
Chapter 8 paragraph 140 states: “We recommend that Government delegate to the new regulator the power to commission and fund the National Trading Standards Estate and Letting Agent Team.”
The “real problem” with RoPA is not a lack of progress, but that it was written by the very people who stand to profit handsomely from its inception, hence their lack of objection.
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Yes, as I said, publicly funded from the outset.
It’s easy to criticise something that hasn’t been fully designed, hasn’t started, and hasn’t been fully developed? It’s called hot air.
Timescale is definitely an issue as most professional agents want to see action, and not words.
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Are you seriously suggesting that the RoPA report and its 54 pages of in depth recommendations can’t be considered “fully designed” or developed and so accordingly can’t be critiscised? If as you suggest it isn’t fully developed then Propertymark need to address their website which clearly states that “Propertymark can support you and your organisation both with getting qualified and preparing for regulation.”
A remarkable feat of foresight… or questionable marketing?
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What I’m saying is, as a starting point, I’m pro-ROPA. The improvements it will bring will outweigh the bluster and negativity that is being blown around. Cheer up, it’ll bring improvements to the sector.
I’m sure you’re right over Propertymark and their magical mysterious foresight, but but only natural that some firms, David’s included, will push and shove each other to be part of the ROPA action. It’s a commercial world.
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Great article and spot-on. Disappointing that none of this came from any of the trade bodies…
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The reason that the trade bodies are not remotely critical of RoPA is because they were in the room writing their business models into the report.
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Spot on! There is plenty of regulation in the industry (especially letting) already, enforcement is the key.
I feel that the trade bodies see it as a way to cash in on the revenue from teaching courses.
I was recently told that to re-issue my Level 3 certificate would cost £60 or a simple one liner to confirm i had passed it would cost £25 at the same time as being told i couldn’t access my candidate account because it was on an old database.
Not much help really, luckily i found it in an old filing cabinet!
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Propertymark and RICS were too busy trying to position themselves as the custodians and agents of delivery of RoPA rather than consulting members about how they should respond, or helping regulatory bodies secure resources for enforcement. TDS for example (with representation from RICS and Propertymark on the board) could target some of the interest from the £250m of tenant monies held to Trading Standards in key areas to demonstrate how enforcement could work?
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The states in the USA carry out their own regulation not a trade body although the RICS would like to think otherwise. The state regulator certainly has sharp teeth. The RICS is more interested in global expansion and its’ relevance is becoming less so.
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After sitting on the Propertymark advisory board myself until a couple of years ago I’d say that the problem is not easily solved. There is no doubt that the industry is suffering as a whole from an identity crisis – leading to the public seeing ever decreasing worth and trust in estate agents. This is magnified in a market where listings are lean and as a result every vendor believes that their house will sell quickly – if only the actually process of selling a house was as easy as just agreeing a price!
Technology has seen vendors be able to market a property sometimes just as effectively as an agent, but its everything else that comes with tieing up a sale and seeing it through to completion that vendors don’t see. It’s a minimum standard issue that if resolved would give some base quality level to the estate agency offering… and that’s why its important to the industry as a whole. The money has gone out of estate agency as a whole because we have let it. Whilst conveyancing firms charges have increased despite the fact that many firms are just as bad as the worst estate agents.
It’s all about standards. But it is a near impossible task to police without money and people behind it to enforce and that’s a real shame as I truly believe that it would make a difference. A National regulatory body, in my opinion. will not work as it is too big a beast to tame. Personally I’d give the power to the local councils, giving them authority to police with an approved provider of estate agency services list based on reasonable minimum requirements being met. Start there and build – increasing standards along the way, which in turn will make it a stronger industry based on quality of service being met – which is essentially what the discussion is about here – the consumer.
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Standards in what aspect of the business?
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Service. Knowledge. Ethics. Customer Care. Diligence.
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A good few points, well made.
Although I don’t buy the narative that the public don’t trust us, I think this is an outdated narative that is not backed up by any meaningful data, certainly not the data from the Ombudsman or PRS. It is a narative pushed by those with a vested interest in selling the story that agents can’t be trusted, in order to sell us a badge or software etc.
Given the size of our market and the number of transactions which take place, complaints are extraordinarily low, points of a percent low… all the more extraordinary given the rather emotional process of buying / renting / letting / selling and managing a home.
I would personally rather pool all the money I punt into various regulatory / compliance / membership bodies and add a little more if required for the trading standards teams to actually enforce the regulations we already have and shut down those who actually break the law.
We don’t need more regulation we need more enforcement, which I think is David’s point.
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Interesting viewpoint James thanks. Some agents aside, I’d argue that trust is built on reputation and the industry as a whole does not have a great one – despite some fantastic agents and businesses. Reputation is built by standards and delivery being met and without minimum standards being set, the bar will never be raised.
I’d also argue that there are a lot of complaints (reviews on the worst estate agents) just not through the ombudsman. Many potential vendors make thier own choices by looking at them and buyers and sellers know that it will have an affect when they post. Rightly or wrongly this is the way many judge us nowadays.
I’d quite happily pay more money myself, even as an individual, to police current laws in place too – but new better standards need to be set for the consumer – which in turn benefits us as estate agents. Then lets get onto the actual process of sale and purchase and the need for change there! 🙂
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“Personally I’d give the power to the local councils, giving them authority to police with an approved provider of estate agency services list based on reasonable minimum requirements being met”
Councils already the power to do so; local trading standard officers, HHSRS, Civil Penalties not to mention a plethora of other powers. Council are not know for being proactive (and likely never will be), so simply saying give them the power to do is to to say “give them the power they already have”. There are an insane amount of laws and regulations governing the industry and PRS specifically is riddled with them (so no, the “consumer” does not need more protection).
I myself am a fan of ROPA, but only if it removes all other regulators. Enforcement of current powers needs to be exercised, not new regulations created.
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Agreed. A single body is needed – or at least a body with local governance reporting to one body. I think people are failing to see that actually this could be a great opportunity for the industry?Jesus, Mary, Joseph and the wee donkey – I’m sure I’m not the only one sick of agents moaning about **** practice and poor agency?! Agents doing less, charging less, in chains in which others do all the work? If people moved everyday then you can be sure that they’d stop using the sh&t agents and they’d either shut up shop or improve. They don’t though and they’ll shrug it off with a we won’t use them next time…. remind me what is the average time now for people between moves?
Powerful policing of current laws is great, but I’m also talking about good practice, top people you’d want to deal with as a consumer who have knowledge that is worth paying for. Even a good agents guide must have a base level service in which to distinguish from.
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My concern is that RoPA as it is currently proposed won’t deliver what you’re hoping for. All it will do is cost agents and agencies a load of money and all the same problems will still exsist.
Bad agent’s aren’t bad because they don’t know how to be good, its a choice they make and no amount of exams, qualifications or CPD will stop that. Being “professional” is much more about behaviour than it is knowledge.
If an agent chooses to be slow, lie, steal a tenants deposit etc etc they do so in the knowledge that they’re doing it, not by accident and the rules already exsist to stop most of this. I cannot see how a regulator will be able to enforce behaviours any more than they already can, if only they would choose to.
The real world implications of this is that we are all licenced but because the licence or revocation of a licence can’t or isn’t then enforced the licence becomes worthless, and we’re all down £5k pa for no reason!
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Agreed
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Agreed and I won’t be parting with my money unless I know it’s got the backing to work. It’s a shame that it’s far easier to believe that it’s all pie in the sky and will never work… but that is the feeling of course with most long serving agents. I’m a great believer in the possible, perhaps to my detriment, but will await with baited breath. Good talking to you
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They are both a total waste f time – 99% of the public have never heard of them
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