‘Secret ombudsman schemes are so much better for leasehold than licensing managing agents,’ says DCLG

The Lords amendment by Baroness Gardner that would see leasehold managing agents required to have a licence will be sabotaged in the Commons tomorrow.

Instead, the Department of Communities and Local Government wants to insist managing agents belong to an ombudsman scheme.

Ombudsmen are widely popular among the vested interests in the status quo of leasehold – such as Peverel – that they are part of their complaints procedure. They give all the appearance of redress without any of the discomforts.

The reason is that ombudsman rulings are confidential.

The DCLG’s preference for mandatory ombudsman schemes is no substitute for a licensing system – where repeat offenders risk having their licence withdrawn.

There will be no improvement to the protection of leaseholder funds under this scheme, which remain very weakly protected.

Housing Minister Mark Prisk was fully aware that the whole sector supported licensing and that both Association of Residential Letting Agents and the British Property Federation have already criticised the new proposals, which have been produced without consultation.

Sir Peter Bottomley urged Prisk to support Baroness Gardner’s amendment to the Enterprise and Regulatory Reform Bill – which was intended solely for letting agents – last week.

“Could I, could we, please be advised urgently whether the department and government expect to accept this Lords amendment or whether there will wrongly be an attempt to exclude managing agents?

“Managing agents who act properly have nothing to fear and nothing to lose. Leaseholders will go on suffering otherwise.”

Bottomley is echoing calls for Prisk to back the amendment from Which?; The Association of Residential Letting Agents; The Property Ombudsman; RICS; Shelter; and the Residential Landlords Association.

All are calling for “greater consumer protection “in the  letting and managing agent markets” through a “simpler more joined up regulatory approach  than that provided by the myriad of local accreditation schemes”.