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Property Ombudsman issues revised Codes of Practice

13 June 2019

The Property Ombudsman (TPO) scheme’s updated Codes of Practice became effective on 1 June. The revisions are substantial, and incorporate the Tenant Fees Act, Client Money Protection and GDPR requirements.

The new codes are available on the TPO Codes page.

TPO consulted with 44 different organisations and individuals during the review process, including the Law Society.

The Ministry of Housing, Communities and Local Government (MHCLG) and the National Trading Standards Estate Agency Team (NTSEAT) provided a technical review of the lettings and sales codes respectively.

Along with the Scottish Sales Codes, they were then scrutinised and approved by the Chartered Trading Standards Institute (CTSI).

Common changes across all the Codes of Practice include the requirement for members to display the TPO logo prominently on their emails, any other digital communications and marketing materials. This is in addition to the existing requirements to display the logo in the window of offices and on agents’ websites.

Based on NTSEAT’s guidance, which considers the Consumer Protection from Unfair Trading Regulations 2008, a requirement to disclose referral fees is now an obligation within the codes to make previously hidden costs open and transparent to consumers.

Under market appraisals, advice obligations have been strengthened to require agents to explain both the benefits and disadvantages of their recommended method of transaction at market appraisal stage, for example, modern auctions or guaranteed rent schemes.

Key revisions to the Sales Code

Leasehold, commonhold and managed freehold disclosure

Agents’ obligations to request and divulge information relating to leasehold have been widened. If material information on the tenure is not known, this should be made clear to the consumer at the outset of marketing.

Dual fees

In relation to the potential risk to sellers of being charged two commission fees when they sell their property, transparency obligations have been updated and expanded together with a definition of effective introduction in the glossary.

Key revisions to the Lettings Code

England only

TPO Code of Practice for Residential Letting Agents is now an England-only code. The current 2016 Lettings Code will continue to apply to Wales and Northern Ireland until such time as Welsh tenant fee legislation becomes effective.

Tenant fees

The code reflects changes imposed on agents by the Tenant Fee Act 2019, with new sections on holding deposits and the fees which are permissible under the Act.

Tenancy deposit replacement products

A further update takes into account the emergence of tenancy deposit replacement products, putting the onus on agents to clearly explain the potential advantages and disadvantages of that product prior to tenants and landlords committing themselves.

Client money protection

The code also reflects the requirement to belong to a Client Money Protection (CMP) scheme and to display the CMP certificate in agents’ offices and on websites.

All other codes including Scottish Sales, Buying Companies, Buying Agents, Commercial and Business, have been updated in line with legislation and best practice obligations.

TPO will apply the new codes of practice when reviewing consumer complaints about events that have occurred after 1 June 2019 to ensure consistent advice, guidance and decision making is applied to both agents and consumers which raises standards and reduces consumer detriment.

TPO is running two sets of workshop sessions at its annual conference on 10 July at the National Conference Centre, Solihull. 

As these changes will have a significant impact on the way agents conduct business, the TPO would like as many people to attend as possible. Tickets are offered with a 40% discount via the code: TPO190710.

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