Housing lawyer Tessa Shepperson has defended accusations that property redress schemes are “useless”.
The accusation was levelled at Carter Stones, an agent in Ilford, Essex, which has featured both in EYE and the BBC You and Yours programme.
Both landlords and tenants complain that they are owed money by the agent – including money handed over after Carter Stones was expelled by both the Property Redress Scheme and by mydeposits.
They complain that after the PRS chucked out Carter Stones, they were left high and dry when the agent continued to trade illegally.
Shepperson, who is an independent member of the PRS Council, said that “the question of enforcement has always bothered us on the Council and we have discussed it many times”.
But she admitted that there is nothing any of the redress schemes can do to close down an agent who is trading illegally.
She said: “I think one of the problems shown up by this issue is that people misunderstand the role of the Property Redress Schemes.
“This is essentially to provide a free route for landlords and tenants who are unhappy with their agents’ service (or the service provided by any of the other PRS members) which they can use to make a complaint, as an alternative to going to court.
“This is beneficial as court proceedings are expensive, time-consuming and very stressful.
“A complaint to the agents’ Property Redress Scheme is free and considerably less stressful for people who are often already stressed out, or out of pocket, by the issue they are complaining about.
“So the schemes all have procedures for members’ customers to use when making a complaint, and qualified adjudicators to consider their case and make decisions and (where appropriate) awards. For example, they have the power to award up to £25,000 – although lower awards are more usual.
“Many cases are resolved at an early stage. If the initial mediation does not succeed, the Ombudsman will make his (or her) award and the Scheme member notified. They are then given a period of time to comply.
“In the vast majority of cases, the scheme member will pay up, or apologise or do whatever he has been ordered to do. If they don’t do this, the penalty is expulsion from the scheme.
“This may sound like a bit of a rubbish penalty but actually it’s not. Under law, all letting agents and property managers must be a member of an authorised property redress scheme as a condition of being in business.
“So if they are expelled from their scheme, they are no longer compliant with the law. None of the other schemes are going to accept them as a member (unless and until they comply with the award made) as they all exchange information about which firms have been expelled and have an agreement to this effect.
“The rogue agent will then be vulnerable to being fined £5,000 and ultimately being closed down by the local authority.
“The problem is that this does not really help the victims of the rogue agent.
“However, there is nothing any of the redress schemes can do about it. They don’t have any powers to enforce the award – that is not what they were set up to do.
“And anyway – what could they do? How do you enforce a financial award against a criminal who has either spent all the money or hidden it where it can’t be found?
“It’s the same in other areas. For example, many, probably as many as 30% of all County Court Judgements, go unpaid. But we don’t say that Judges are useless and that there is no point in having a County Court system.”
Shepperson’s full blog is here: http://www.landlordlawblog.co.uk/2017/03/09/property-redress-schemes-useless/