CIELA has considered all of the different regulations affecting this industry, ranging from those that affect only estate and letting agencies to those that affect commercial businesses in general.
Simultaneously, CIELA has spent extensive time and resources researching why the public has such a negative view of estate and letting agencies, and what exactly we can do to correct this. Based on feedback from our members, our supporters and even our opponents, we learned that the biggest image problem the industry has is the few rogue agents that taint the entire reputation. Hence, our phase-by-phase rollout of a public search engine that allows any curious party to determine whether a particular agency/sole trader abides by certain legal requirements.
In light of this, here is a list of the most important regulations of the industry. We have presented them in a way that hopefully is simple for you to follow.
Any and All Business Owners
→ Register under the Data Protection Act:
The Data Protection Act 1998 requires every data controller (eg organisation, sole trader) who is processing personal information to register with the ICO, unless they are exempt. This means that any estate and letting agency, or an agent working as a sole trader, must register with the DPA. Why? Because you necessarily deal with personal data (individual’s information) as part of your business, regardless of whether you are in sales, lettings or both.
If you have not registered, you may do so here for £35/year: https://ico.org.uk/for-organisations/register/. It takes approximately 15 minutes.
GDPR changes: As of April 2018, Companies will no longer need to register under the DPA, but they will still have to pay the ICO a data protection fee. [Pursuant to the Digital Economy Act] The final fee amounts must be approved by Parliament, but they are proposed as follows:
Tier 1, small & medium firms that do not process large volumes of data: annual fee of up to £55
Tier 2, small & medium firms that do process large volumes of data: annual fee of up to £80
Tier 3, large businesses: annual fee of up to £1000
Direct marketing top up fee of £20
You should continue to renew as usual because to not do so is a criminal offence, and ICO expects that any payments made during the 2017/18 financial year under the current system will run for a full year. Organisations that pay their annual notification fee at any point during this time will not need to pay the new fee until their notification under the old model would otherwise expire.
→ Employers Liability Insurance:
If your business employees people, the Employers’ Liability (Compulsory Insurance) Act 1969 states that you must have an employers liability insurance policy in force. This should cover all full-time, part-time, and temporary staff, as well as self-employed contractors, apprentices, and voluntary workers. You are legally required to have insurance that covers up to £5m.
→ Member of a redress scheme:
As of 1 October 2014, SI 2014/2359 requires that any company or sole trader that engages in letting agency work must be a member of a redress scheme for dealing with complaints in connection with that work.
Three have been approved:
→ Money Laundering Regulations:
Unless the agency solely performs letting work, any company that engages in estate agency work must be registered with HM Revenues & Customs for anti-laundering purposes. [Money Laundering Regulations 2007] Each business must register, and each premise from which that company carries out business activities must also be registered. If you have not yet registered with HMRC for anti-money laundering supervision, you may do so here.
Agencies whose work includes lettings work
→ Display of fees:
[Consumer Rights Act 2015, c. 3 part 3 sections 83-88] As of 27 May 2015, all letting agents must display all fees on their website, each of their physical premises, and in all advertising materials. These include all charges or penalties which are payable to to the agent by a landlord or tenant in respect of letting agency work and property management work carried out by the agent in connection with an assured tenancy.
→ Statement of whether you are a member of a client money protection scheme, or not:
[Consumer Rights Act 2015, c. 3 part 3 section 83(6)] The consultation period for whether it will become a requirement for all agents who engage in lettings work ended in December 2017, and all reports are stating it will become mandatory. However, there is not currently a set deadline for this. In the meantime, all agents who engage in lettings work must demonstrate that they state if they are a member of a CMP scheme or not.
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