Hot Topic Highlight - Residential Agency Update (February 2019)

Posted on 05 / 02 / 19
by Jen Lemen

Hot Topic Highlight - Residential Agency Update (February 2019)

Building a better you 

Property Elite’s sole aim is to build better property professionals - supporting your career every step of the way, whether you are completing a RICS accredited degree course, your RICS APC/AssocRICS or simply seeking engaging CPD. 

This week, we will be looking at three key proposals which will affect residential agency during 2019. Make sure you are aware of these if you are sitting your RICS APC or AssocRICS assessment this Spring.

If you are planning to sit your RICS APC/AssocRICS this Spring, you'll want to have your preparation well under way this month. We've got lots of candidates already signed up to support their Spring 2019 submissions - in our experience, the earlier you seek additional support, the better chance you have of RICS APC success! 

If you've been referred previously - don't panic. Just email a copy of your referral report to jen@property-elite.co.uk for some free advice on what to do next. 

Not sure about signing up? You can read what some of our recent successful candidates have to say here. We work with candidates across all RICS APC and AssocRICS pathways, routes to assessment and geographic regions.

If you have been referred or want to discuss your RICS APC, contact us on 07804 642 825 or email rachel@property-elite.co.uk - we offer every candidate a free & friendly 30 minute RICS APC consultation.


What's new?

  1. Government commitment to introduce 5 yearly mandatory electrical safety checks
  2. Proposals to require residential landlords to join a redress scheme
  3. Proposals for reservation agreements to be brought into the transactional agency process

We will look at each of these in more detail below.


1. Electrical safety checks

At present, landlords have the following responsibilities in relation to electrical safety:

  • Electrical installations in rented property must be safe when tenants move in and kept in a safe condition during the duration of any tenancy agreement.
  • 5 yearly periodic inspections of electrical installations are required for Houses in Multiple Occupation (HMOs). Read more about changes to HMO licensing in our recent blog.
  • Electrical appliances must be safe and have at least the CE marking

However, at present, periodic inspections of electrical installations are not required for rented property which does not fall under the definition of a HMO. 

Due to the increasing size of the private rented sector, which now accounts for roughly 20% of all households, the Government carried out consultation on electrical safety standards

The outcome of this will be the introduction of 5 yearly mandatory checks 'as soon as parliamentary time allows', for all private rented property. Landlords will also need to ensure that the inspector or tester they instruct to carry out the checks are competent to do so, e.g. by being part of a competent person scheme or signing a checklist to certify their competence.

A landlord who is in breach of the proposed rules may be liable for a fine of up to £30,000 or a banning order for repeat or serious offences. 


2. Redress schemes

In January 2019, the Secretary of State for Housing, Communities and Local Government announced proposals to require landlords of private rented property to join a redress scheme. 

At present, only letting and property management agents are required to be part of a redress scheme.

The proposed redress mechanism will be through the Housing Complaints Resolution Service. This is proposed to provide recourse for both private tenants and homeowners. 

If a landlord does not comply with the proposed requirements, they may face a £5,000 fine.


3. Reservation agreements 

The Government is currently considering ways to speed up and improve the process of buying and selling residential property. A key aim is to try to reduce the amount of sales that fall through during the exchange and completion process.

The primary way they are looking to do this is through a 'model' two page reservation agreement. This follows a Department for Business, Innovation and Skills survey which found that 50% of buyers and 70% of sellers would be happy to enter a reservation agreement to reduce the risk of a sale falling through.

The Government are looking at the specifics of what a reservation agreement might include, for example the amount of the reservation fee and in what circumstances a consumer may be able to pull out without paying a penalty, e.g. suffering a bereavement or being made redundant.

Formal proposals are expected to be published later in 2019.


How can we help?

  • Sign up for a complimentary copy of our Ebook Guide to the APC (UK and MENA editions)/AssocRICS/Senior Professional Route/FRICS, together with our updated APC Hot Topic Guide - full of even more helpful advice and tips to pass your RICS APC or AssocRICS with flying colours first time
  • Sign up for our bespoke support services, such as our final assessment review & feedback service, RICS APC question packs (around 1,000 questions/30 pages based on your submission), e-mock interviews and revision quizzes. Don't forget that we offer some great value discounted packages if you purchase more than one support service
  • If you're confused about anything, just contact us on 07804 642 825 / rachel@property-elite.co.uk. We offer all candidates a free & friendly 30 minute RICS APC consultation

Not sure about signing up? You can read what some of our recent successful candidates have to say here.

Stay tuned for our next blog post to help build a better you

N.b. nothing in this article constitutes legal or financial advice.