Regulation of Property Agents Working Group (RoPA)

Raising professional standards in the industry with all agents to have a minimum Level 3 qualification to meet the standards of regulation.

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The working group's announcement is good news for raising professional standards in the industry. The focus is to get all practicing agents on the path to qualification and comply with the regulations. Register for regular updates on the recommendations in an easy to understand framework.

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On Thursday 18 July the Ministry of Housing, Communities and Local Government (MHCLG) released a report of the recommendations of the Regulation of Property Agents Working Group (RoPA). Housing Minister Heather Wheeler MP set up the group in October 2018 and appointed Lord Richard Best as Chair. ARLA Propertymark and NAEA Propertymark have been part of the small group of industry stakeholders which has examined several key industry issues, including regulation and qualification.

Propertymark has long called for Government regulation to ensure everyone in the industry is licensed, adheres to a strict code of practice and holds at least a Level 3 qualification (the level equivalent to an A-level). It offers huge potential for the professionalisation of the sector and to stamp out bad practice.

The working group has proposed a new regulatory framework to cover estate agents in the UK and letting and managing agents in England only. It is important to note that the private rented sector is a devolved issue and that the Welsh and Scottish Governments have already introduced legislation to regulate letting agents.

The working group has recommended in their report that:

1

All agencies operating a residential property business should be licensed and licensing should include a fit and proper person test for company directors.

2

All customer-facing staff employed within residential agency business should be licensed and adhere to a Code of Practice.

3

All customer-facing staff employed within residential agency business should hold a qualification at Level 3 or above.

4

All company directors and management agents should be qualified to a minimum of Level 4.

5

A new regulator to be appointed to oversee compliance with an overarching Code of Practice.

What is Propertymark's view?

We have campaigned for higher professional standards in the industry for many years. It is vital that consumers can have confidence that the agent that is providing them with information, dealing with their transaction. This is welcome news for the industry and for consumers.

START TO PREPARE

Mark Hayward, Chief Executive NAEA Propertymark and David Cox, Chief Executive ARLA Propertymark comment on the final report from the Regulation of Property Agents (ROPA) Working Group:

'This is a significant moment for those in the property industry and a huge leap forward in stamping out bad practice. We have long called for Government intervention to ensure everyone in the industry is licensed, adheres to a strict code of practice and holds at least a Level 3 qualification (A-level). Following the extensive considerations by the working group, it is now for Government to create the structures for a properly regulated industry, whose professional knowledge and skills are trusted and respected by all.

'These are substantial changes which will require agents to start making preparations now to ensure that they are well placed for when these proposed qualification requirements are introduced. While we anticipate that the need for property qualifications will be phased in, we advise agents to get ahead of the competition and to stand out by adopting the new requirements early. Propertymark can support you and your organisation both with getting qualified and preparing for regulation.'

Frequently asked questions

About RoPA

What is RoPA?

RoPA stands for the Regulation of Property Agents.

What was the aim of RoPA?

The RoPA working group was created to advise the government on:

  • a model for an independent property agent regulator, including how it will operate and how it will enforce compliance
  • a single, mandatory and legally enforceable Code of Practice for property agents;
  • a system of minimum entry requirements and continuing professional development for property agents
  • explore fees, charges and ability to choose a managing agent for leaseholders and freeholders.

Who chaired the RoPA Working Group?

The working group was chaired by Lord Best, who has been an independent crossbencher of the House of Lords since 2001. He has extensive experience from his years working across the housing sector.

Who participated?

The RoPA working group was made up of a number of property industry and consumer stakeholders that included: ARLA Propertymark, NAEA Propertymark, Royal Institution of Chartered Surveyors (RICS), National Trading Standards (NTS), Professor Christopher Hodges from Oxford University, Institute of Residential Property Management (IRPM),  Leasehold Advisory Service (LEASE), National Landlords Association (NLA), Citizens Advice and Ombudsman Services

Why is it important?

In October 2018, UK Housing Minister, Heather Wheeler, announced that a new working group called RoPA would be set up and tasked with advising the UK Government on a new regulatory framework for letting, managing and estate agents.

Why now?

The measures are in line with the UK Government’s responses to its calls for evidence on Protecting consumers in the letting and managing agent market and Improving the home buying and selling process.

Why is the group recommending licensing?

Professional agents agree that bad practice is detrimental to consumers, agents and the reputation of the property sector. The working group, chaired by Lord Best has explored a variety of models of regulation, considering the wider context of different professional infrastructure and the financial and emotional consequences of bad practice within the residential property industry.

Licensing would facilitate a structure of regulation, including adherence to a code of practice, a fit and proper persons test for directors and a register of agency licences available to consumers. In turn, this would drive up the standards of service provided to consumers.

Propertymark has long argued that piecemeal regulation does not work. A coherent, overarching framework of regulation is essential in order to create a level playing field and remove the two-tier market that currently exists.

Who will the regulator be?

A new, independent regulator must be appointed through a fair and open competition process and be accountable via a board, to the Secretary of State for Housing, Communities and Local Government. The regulator must be required to report annually on its progress in raising standards through key performance indicators.

The working group stipulate that independence requires that the new regulator’s Chief Executive must not have worked within a licensable firm in the three years prior to or following their appointment. Furthermore, members of the new regulator’s board must not have been employed by a registerable firm in the three years prior to their appointment.

How RoPA's recommendations could affect you

Why should individuals be licensed? Surely the focus needs to be on agencies.

The working group found that while firms can be held responsible for the competence and training of their staff, individuals are the only ones that can hold qualifications.

Furthermore, requiring individuals to hold qualifications will bring them into line with other regulated professions. One such example is a qualified lawyer who mismanages confidential information, their licensed status means that they cannot leave one practice and move to another without taking personal responsibility and consequence for malpractice.

There are other strands of consumer protection that individual members of staff cannot be held responsible for, including belonging to a Government approved Client Money Protection scheme or having an effective complaints procedure in place.

While qualifications should not burden individuals with excessive cost or time commitment, they do need to be sufficient to demonstrate an individual’s commitment to the profession. There is a consensus among the group that customer facing agents should be able to demonstrate the knowledge and skills equivalent to a level 3 qualification (at a level equivalent to an A Level) while company directors actively involved in the business should achieve a level 4 qualification (at a level equivalent to High National Certificate). 

The group firmly believe that qualifications are the bedrock of raising professional standards and consumer confidence. 

Does this apply to all staff working in estate and letting agencies?

The recommendations of the working group are that a list of ‘reserved activities’ is created which can only be performed by a licensed individual at a regulated firm. The suggested starting points for a list of reserved activities are:

  • Conducting viewings
  • Market appraisals
  • Negotiating with and on behalf of clients
  • Signing contracts
  • Providing direct advice to clients

Licensed individuals need to meet the applicable licensing and qualification criteria to perform reserved activities. Staff working within a regulated firm but carrying out purely administrative work, not interacting with, or offering a service to customers, should not require a professional qualification.

Is my existing qualification applicable?

Many agents already hold a qualification at level 3 or a higher level than the proposals. The regulator will set the syllabus that accepted qualifications will need to meet.

Until the regulator sets the syllabus, no qualification can be marketed as fully compliant, however the group recommend that where an individual holds an existing qualification below the specified level, they be allowed to make up any difference between that and the required standard.

Propertymark is confident that agents in possession of established, OFQUAL regulated level 3 qualifications will have a significant head start in being ready for regulation.

For those who do not currently hold a qualification, as long as the regulator ensures that the syllabus is relevant to the respective discipline, experienced agents should have no problems and very limited expense in achieving a qualification.

Will agents have to sign up to one of the existing Codes of Practice?

The working group has looked at a number of professional codes of practice and outlined high-level principles that a new overarching code should incorporate.

The recommendation is for a single set of principles for all agents to adhere to with provisions specific to each discipline. This will ensure that agents understand the expectations and allow clear criteria for breaches. The regulatory code must make clear that agents will have the responsibility to disclose any material breach of standards or threaten residents’ safety.

Will this put off new entrants to the industry?

On the contrary, we believe that raising professional standards and increased respect for property agents will encourage more new entrants to the industry and a higher calibre of candidates.

The working group recommend that apprentices who are working towards level 3 qualification should be permitted to work in the industry under supervision by a qualified member of staff.

What will this cost?

The working group has emphasised throughout discussions, that the industry cannot bear excessive costs in the context of depleted stock, market uncertainty and wave upon wave of legislation, not least that of a ban on Tenant Fees and measures around referral fees.

The recommendations are for substantial changes and it is essential that Government allow sufficient lead-in time to give thousands of staff currently working at varying levels, the time needed to take and pass qualifications. As long as the regulator ensures that the syllabus is relevant to practice, experienced agents should have no problems and limited expense in achieving the necessary qualification.

Costs for taking exams should be affordable for those wanting to work in a professional environment but the sooner that individuals make a start, the better.

What is the current state of play for...

...Sales agents?

Currently, estate agents are not required by law to be licensed or qualified. In Scotland, a solicitor will manage much of the property sale.

However, in England, Wales and Northern Ireland, unless the estate agent is a qualified chartered surveyor, he/she will liaise with other professional parties.

Estate agents are principally regulated by the Estate Agents Act 1979 and the Consumer Protection from Unfair Trading Regulations 2008. In addition, since 1 October 2008, all estate agents in the UK who engage in residential estate agency work are required to belong to an approved redress scheme under the Consumers, Estate Agents and Redress Act 2007.

...Letting agents?

There is currently no overarching statutory regulation of private sector letting or managing agents in England, nor is there any legal requirement for them to belong to a trade association, although many letting and managing agents do submit to voluntary regulation.

  • Scotland - has introduced a registration scheme for letting and managing agents.
  • Wales - requires agents to be licenced
  • Northern Ireland - in January 2017 the Department for Communities announced an intention to “Introduce a regulatory framework for all letting agents including bringing forward legislation to ban letting agent fees.”
  • England - no comprehensive regulation of letting and managing agents.