Property Disputes
In the complex world of property, disputes can be challenging to navigate. In the UK, there are two key redress schemes to resolve property disputes: The Property Ombudsman (TPO) and the Property Redress Scheme (PRS).
Designed to secure fair outcomes for consumers, neither are consumer champions. They’re impartial and always aim to reach fair decisions without court proceedings.
In the UK, it is an offence for an agent not to be a member of a redress scheme. The new Renters Reform Bill also means landlords must be members of the Housing Ombudsman. When working with an agency, it’s important to understand their chosen scheme should a problem arise. The scheme will give all parties peace of mind that there is a fair dispute management process.
Redress Schemes in the UK
The two main redress schemes pave the way to a fair and structured outcome. Whether the dispute is between a letting agent, an estate agent, or a landlord and tenant, the schemes aim to reach a suitable result. The TPO and the PRS have aligned goals but different backgrounds and processes.
In our post, we explore the two schemes. We uncover codes, backgrounds and how they fit into the property market.
What is TPO?
Whether you’re a landlord with a contractual breach, a tenant recognising professional misconduct or a seller with a complaint, The Property Ombudsman (TPO) is an impartial, independent body aiming to reach a full and final settlement for disputes. The not-for-profit organisation is for redress, not regulation, existing for the benefit of the consumer.
Should the agent not settle the dispute, clients visit the TPO for free advice or to handle the enquiry. The TPO aims to resolve issues quickly, avoiding lengthy and costly court cases. Katrine Sporle, The Property Ombudsman, explains, “An ombudsman exists to deal with complaints that haven’t been resolved by the person who sold the service.”
The TPO covers a maximum of £25,000 on a case-by-case basis. While some outcomes might cover a smaller amount of £50-150, more serious complaints where the client has lost money may be awarded with costs covered plus compensation. In 2022, the biggest awards were £21,779 (lettings), £15,500 (sales) and £23,634 (RLM).
The not-for-profit organisation isn’t funded by the government, meaning they can be impartial with no conflict of interest. While it’s not mandatory for an agency to be a member of the TPO, agencies join this scheme specifically to increase consumer confidence and develop quality agents.
TPO Code of Practice
The TPO code of practice sets the rules for how agents within their scheme should behave, conduct their work, and treat clients. This helps set high standards in the industry while protecting consumers. Following an aligned rule book ensures clients offer high standards and remain lawful. Agents who are members of the TPO must make the code of practice available to consumers. The TPO can consider consumer complaints against members should they go against the code.
Any agent who is a member of the TPO scheme but fails to comply with the Ombudsman’s award or direction faces expulsion from the scheme. With a Memorandum of Understanding in place with PRS, agents cannot join another scheme while they have an outstanding matter with another. The list of expelled agents is public for individuals to see.
In 2022, the TPO had almost 45,000 consumer enquiries. The organisation handled under 14,000 issues from tenants and landlords about their letting agents at the enquiry stage, avoiding formal complaints. The year saw an increase in the requirement for formal decisions, indicating the increasing complexity of cases.
Who Does the TPO Cover?
The TPO covers anyone who works with an agent who is a member of the TPO. Landlords, tenants, buyers and sellers can raise a claim against a TPO member if they have gone against the code. While the TPO doesn’t cover private landlords, if an agent who is a member of the TPO represents the landlord, the landlord is protected against a poor code of practice through the scheme.
What is the Property Redress Scheme?
The Property Redress Scheme (PRS) is government-approved. While similar to The Property Ombudsman in how it helps resolve disputes and maintains industry standards, the scheme works slightly differently. For example, with PRS there is no code of practice. Instead, they implement reasonable industry practices.
PRS offers structured processes for lodging complaints and resolves the issues quickly without needing court proceedings.
The Renters Reform Bill and Redress Schemes
The new Bill requires all landlords to join a designated government-approved ombudsman, regardless of whether they use a letting agent. This allows tenants to make a complaint against a landlord and raise an independent investigation. With the introduction of the Renters Reform Bill, the property redress landscape is evolving.
The government has approved just one scheme for all landlords to join, the Housing Ombudsman. With one scheme for all landlords, tenants will have a streamlined service. Jacob Young, Under-Secretary of State for Levelling Up, explained, “Having one provider for all social and private renting tenants would provide streamlined and simple-to-use redress services for complainants.” This is likely to change how PRS operate.
The Difference Between PRS and TPO
PRS and TPO seek to solve disputes without court and ensure agencies comply with legal obligations. While PRS agents don’t follow a code of conduct, TPO agents do. The code of conduct helps set a high standard for the industry, giving consumers more confidence.
While PRS is industry-funded and TPO operates independently, they both have proven track records in satisfying consumer outcomes. Both schemes safeguard consumers, and property agents remain accountable to ensure a fair and transparent property industry.
Central London Estate Agents
BHHS London are members of The Property Ombudsman, and we proudly adhere to the high standards in the Code of Conduct. We ensure landlords, tenants, buyers, and sellers receive the best outcomes from our service and any disputes.
If you need guidance or advice for your lettings, contact our Central London Estate Agents team.
