After calls for more regulation across the property industry the Regulation of Property Agents Working Group has put forward suggestions for a new single, mandatory and legally enforceable overarching regulatory framework (RoPA). Some of you might recall, however, that it wasn’t too long ago that The Property Ombudsman updated its own TPO Code of Practice. We went through both documents with a fine-toothed comb (and a red pen!) to work out how they compare.
When it comes to dealing with consumers
Although broadly similar to TPO’s Code of Practice in its approach, the RoPA-proposed overarching framework digs deeper into the detail when it comes to how agents should interact with consumers. In particular, RoPA places a much greater emphasis on agents acting with ‘due skill, care and diligence’ than TPO.
As part of that, RoPA stipulates that agents must:
- Be open with the Regulator about matters that might affect their trust in the profession.
- Notify authorities regarding any suspicions of money laundering or human trafficking that they come across.
- Document any and all conflicts of interest they might experience.
- Provide full disclosure as to any information they hold which might threaten a resident’s safety.
While TPO’s Code of Practice was also designed to stamp out bad practice, it does not currently address any of the above, which means it doesn’t contain the levels of self-reporting that RoPA calls for or feature the same commitment to promoting a culture of openness and transparency within a business.
When it comes to managing businesses and staff
Again, while TPO’s Code of Practice contains some strong specifications when it comes to managing business responsibly and effectively, RoPA goes further with its recommendations, promoting a more regulated, regimented approach than its predecessor:
- RoPA recommends that letting agents must be qualified to handle responsibilities. It suggests all staff delivering ‘reserved activities’ employed within the residential agency business should hold a qualification at Level 3 or above, with company directors and managing agents expected to hold a Level 4.
- It calls for agencies to implement appropriate arrangements to protect consumers’ money, going into significantly more detail than TPO on this area.
- It offers a more detailed look at implementing more effective complaints procedures.
- RoPA sets out a specific obligation for agencies to manage their businesses effectively; this requirement does not feature in TPO.
While RoPA can be seen to represent the logical next step forward from TPO, there are some areas where TPO’s Code of Practice is more detailed, most notably on the matter of record-keeping. For example, RoPA recommends that agents must maintain appropriate records of business activities but TPO is much more specific about which records need to be kept. TPO’s Code of Practice also has more detail on the importance of transparent and accurate agent communication. Even taking these details into account, our review concluded that when RoPA comes in, it will be stricter than TPO, which will bring about positive change in the industry.
We look forward to seeing the detailed draft sector specific codes when they are published later in the year.