Next steps for the lettings industry – are you ready for registration?

Head of Dispute Resolution at mydeposits Scotland, Suzy Hershman, discusses her recent trip to Scotland for the 'Ready for Registration' presentations and how this change is will influence the sector. 


This April I attended lettings industry presentations in both Glasgow and Edinburgh on being ‘Ready for Registration’. Presented by the Scottish Government, their message was clear; this is what the industry has requested. Given the implications surrounding the industry at present, not just in Scotland but in all regions, I was not surprised that both sessions were full and that additional sessions had to be scheduled.

The Letting Agent Code of Practice (Scotland) Regulations 2016 sets out the standards that will be expected from those who carry out letting agency work in Scotland. The Code itself is well laid out and easy to understand but as with any drafted legal document interpretation can differ; one case in point was a long discussion on how to decide exactly who must be qualified.

The purpose of the Regulations is to create a level playing field by raising standards across the industry, giving confidence to both landlords and tenants using these services. The presentations’ aim was to examine the changes and clarify the steps that need to be taken in order to comply with the Code.


How to comply with the Code

In order to be added to the register, the applicant has to prove they are ‘fit and proper’ to practice their profession. This means people being trained, qualified and registered, in order to continue practising, by 30th September 2018. To prevent a late stampede for registration, applications to register will be taken from January 2018. Once registered the agent will receive a certificate and registration number which will need to be added to all business communications.

In addition to the training which requires five one-day courses and an exam, at no small cost, businesses will need to check they have a verified ring-fenced ‘client account’, that their Terms of Business comply with the Code and they have professional indemnity insurance and client money protection (CMP).

It was interesting to find that just having the words ‘client account’ on your account does not mean the money in that account is automatically ring-fenced. In order to ensure compliance the account must be a ‘dedicated’ client account with no right to set-off or lien unless they are members of the Law Society or RICS in which case their account will be ‘designated’.

Some agents in the room were aware of this and had checked their accounts. Others were going to do so after the sessions. Surely the banks must take some responsibility here and any errors in account set-up will be rectified immediately and without cost to the business.

In Glasgow, I spoke to an agent looking to pass her business on to her daughter in the next eighteen months but was looking for clarity on how, and who needs to be qualified if she is not in the office. The answer was ‘at least one person per office where letting agency work is undertaken’. Each business is also expected to have a contingency plan if that one person is absent for any length of time.


How will the register be monitored?  

The register will be monitored and managed centrally by the Government, as opposed to the Landlord register which is managed and maintained by the 32 individual local authorities.

The qualification will last for three years. When it comes to renewal, the applicant will need to prove that 20 hours of Continuing Professional Development (CPD) has been undertaken over the last 3 years.


What happens if you don’t comply?

The first tier tribunal will hear cases where a landlord or tenant alleges their agent has not complied with the Code and enforcement orders will be issued to the agent where a breach has been established.

It is clear that the Government are not looking to put people out of business but to make sure they understand that letting agents need to comply in order to continue running their business. We at mydeposits Scotland will be keeping a close eye on developments and keeping our Members updated.

I would advise that agents try to get themselves compliant as early as possible. This means undertaking the mandatory training, purchasing professional indemnity insurance and obtaining client money protection. The client money protection page on the Government’s agent registration web page sets out the options available to agents. mydeposits Scotland works closely with Client Money Protect for those just looking for CMP and we recommend UKALA if you wish to join a trade association.


For more information from the Scottish Government click the link below. 




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