Home Business Insights & Advice Property redress scheme: What you need to know

Property redress scheme: What you need to know

by Sarah Dunsby
30th Jul 18 10:31 am

Government legislation requires that all estate agents who deal with residential property must join an authorised redress scheme. There are three authorised schemes available from:

– The Property Ombudsman Limited
– Ombudsman Services
– Property Redress Scheme

Any agent who fails to sign up to an authorised scheme is likely to receive a hefty penalty charge from, or even be closed down by their local council, so it is essential to ensure that your business complies with all the relevant guidelines.

What are redress schemes?

Property redress schemes exist to provide an avenue for consumers to resolve complaints they have against their estate agents without the matter having to go to court. Consumers are required to complain to the agent first, and give them a fair chance (usually eight weeks) to resolve the issue before going to the redress scheme.

Redress schemes can deal with almost all complaints from customers including:

– failure to explain things properly
– avoidable delays
– hidden fees
– rudeness

However, redress schemes will not handle complaints which are:

– the fault of the landlord of a let property, unless the agent is also to blame; or
– about the non-return of all or part of a tenancy deposit. Complaints about deposits will still go to the tenancy deposit dispute resolution service.

What powers do redress schemes have?

Redress schemes will investigate all complaints they receive from consumers. It is essential that, as an agent, you co-operate with any investigations, as not doing so is likely to lead to the scheme upholding the customer’s complaint even where otherwise it may not have done so.

If the complaint is upheld, the scheme can require you to:

– apologise to the customer
– reimburse the customer for any financial losses, as determined by the scheme
– pay compensation to the customer for avoidable distress or inconvenience caused

The decisions made by the scheme are binding on both the customer and you, the agent.

Do customers have to use the redress scheme?

No. Customers can still complain or take action through other channels including:

– complaining to Trading Standards
– making a complaint to Propertymark, if you are a member
– taking action through the courts

However, as complaining through redress schemes is free for the customer, it is hoped that most will seek to exhaust this avenue before considering other options.

What does this mean for agents?

There is a cost to joining an authorised redress scheme, and this must be borne by your business. Of course, you are free to seek to pass on this cost to your customers if you wish.

On a broader level, though, you should see the redress schemes as a positive benefit for your business, rather than a cost. For reputable and reliable property development businesses and estate agents, it will:

– increase public confidence in the industry
– provide a clear, easy to understand complaints procedure for when things do go wrong
– reduce the number of complaints which result in costly (for both parties) court action.

As an agent, you can promote your membership of the scheme to your potential customers, letting them know that, in the unlikely event that anything goes wrong, you have paid for membership of an independent organisation which can put things right.

Should you ever be unlucky enough to end up having to rebut a customer’s complaint in the courts, the fact that you are a member of a redress scheme can still work in your favour. As well as the scheme’s findings in respect of the particular case, the fact there has been an independent investigation can be persuasive to the court in helping to agree with your version of events and find in your favour.


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