Consultation on a draft statutory code of practice and training requirements for letting agents in Scotland: analysis of consultation responses

5. Equality and Business Impact

Q15: Do you have any comments on the partial Equality Impact Assessment?

5.1 Respondents were asked to comment on the partial EqIA. Just under one fifth of respondents (18%) provided feedback (17).

Strengthen the sector

5.2 Some (6) of these respondents, said that they agreed with the conclusions of the partial EqIA, and felt that the approach would have a generally positive impact on protected groups. Although concern was raised about the proposed 'right to rent" checks in the forthcoming Immigration Bill, as this might negatively impact on vulnerable groups. Others were of the view that the Code of Practice and Training Requirement would have a positive effect on the sector by improving standards of professionalism, and would also help to strengthen the position of tenants who have protected characteristics. In particular, Capability Scotland said that the regulation of letting agents had the potential to strengthen the rights of disabled tenants and prospective tenants, and would help to challenge discriminatory practice.

Insufficient data

5.3 A few respondents felt that the EqIA required more statistical data, and that more use should be made of census data. It was suggested the statistical data should be developed over time, and this would benefit the sector.

Public awareness

5.4 A few respondents highlighted the importance of increasing public awareness of the Code of Practice, suggesting that it should be included within Tenant Information Packs, the Renting Scotland website, and as an appendix to agency agreements with clients.

Poor practice

5.5 A few respondents expressed concern that the EqIA misrepresented the scale of poor practice in the letting sector. It was felt that only a minority of agents actually provided a bad service (this was often based on anecdotal evidence), therefore more emphasis should be placed on promoting a positive image of the sector, highlighting that the majority of letting agents provided a professional service.

Additional comments

5.6 One respondent suggested that letting agents should be able to decline tenants, who they considered to be too young to rent certain categories of property, and this should not be seen as discriminatory.

5.7 Another respondent raised concern that letting agents do not have the same lobbying or influencing powers as social housing organisations, therefore it was felt that less attention was paid to the 'voice' of letting agents by Scottish Government. This respondent also stated that allowing the private rented sector to flourish would be the fastest way to encourage the growth of affordable housing.

5.8 Finally, a tenant/community group organisation said that the EqIA should give enough consideration to the impact on co-owners of buildings. It was also suggested that the EqIA could reference the Glasgow Factoring Commission's report.

Draft partial business and regulatory impact assessment

Q16a: To assist us in determining the impact of the training requirement we are interested in the current level of training by those we are proposing covering by the training requirement.

Please provide us with any information or comments you have that could help to inform this.

5.9 Respondents were asked to give details on the current level of training they provide. A third of respondents (33%) provided comments.

Training is welcomed

5.10 A few respondents made broad statements supporting the introduction of mandatory training. It was felt that training would improve standards, provide higher quality service to clients, and would be of overall benefit to the letting sector. In addition, staff members would benefit from improving their knowledge and skills.

Details of training

5.11 Many respondents (9) provided details of their organisation's training procedures, along with examples of structured training courses that staff had completed. The formal qualifications gained from such training included: the NFoPP and ARLA management certificates; SCQF level 5 and 6 in Property Management Practice; and apprenticeship routes to MRICS certification.

5.12 Many (8) respondents also provided information on the frequency and length of training which their staff members undertake. This ranged from two and half hours per month to 20 hours per annum. A few of these respondents also said that their staff attended courses run by LAS. In addition, one local authority said that it partnered with LAS to offer monthly training for local letting agents.

5.13 The CLA submitted information summarising its letting agent survey, this demonstrated that forty percent of letting agency staff hold an SCQF level 6 qualification; eighty-eight percent undertake yearly training; and thirty-nine percent of staff complete at least ten hours of training per year.

5.14 One respondent commented that RICS members should be exempt from the mandatory training requirement, as they are already required to undertake 20 hours of professional development each year.

Delivery of training

5.15 Many respondents, provided comments on how the training should be delivered, in-house training was preferred by some respondents, online training and web seminars, were also seen as good training methods.

5.16 A few respondents commented that the Code of Practice lacked detail on how training would be delivered. Clarification was sought on whether training would take the form of distance learning, seminars, courses, or events, and whether proof of attendance would be in the form of certificates or a central database.

Cost

5.17 Many respondents expressed concern about the likely cost of training, and the impact of this on letting agents. One respondent feared that these costs might be reclaimed by increasing the management costs of each property.

5.18 On the other hand, some respondents thought that the 'fears' of additional training costs were exaggerated, as training costs were already an expenditure for some letting businesses, particularly those who are associated with professional or trade bodies.

Recommendations

5.19 A few respondents provided recommendations in relation to training. One recommended a 10-hour minimum training requirement per annum. Another highlighted that the lettings qualification offered by the National Federation of Property Professionals (NFoPP) was a good place to start.

Other comments

5.20 A tenant/community group organisation stated that, in their experience, the level of training and knowledge among a "substantial minority" of letting agents was poor.

5.21 In addition, another respondent from a representative body, highlighted that the majority of its members were employees of property owners, and those employees had a mix of skills and experience, from chartered surveyors, lawyers and individuals without formal qualifications on letting agency work.

Q16b: Do you have any comments on the partial Business and Regulatory Impact Assessment?

5.22 Respondents were asked if they had any further comments to make on the partial BRIA. Just over one fifth (21%) of respondents provided a response.

Regulation is welcomed

5.23 A few respondents stated that regulation would help the letting agents sector move in the right direction, and would help to improve overall standards within the sector.

Costs

5.24 Many respondents provided comments in relation to the cost of introducing the Code of Practice and mandatory training requirement. Some commented that business costs can be offset as a tax liability, others felt that public awareness, and enforcement of the new legislation would be important considerations. Another respondent felt that the overall benefits to the sector would far outweigh the costs.

5.25 Many organisations raised concerns about the cost of training. Some felt that the increased costs associated with regulation might make agencies less attractive to landlords, as this might increase landlords' fees. This might result in more landlords self-managing to avoid these extra costs.

5.26 Another respondent felt that the cost of training had been significantly underestimated and suggested that £200 per day of training rather than £66 per day proposed in the consultation paper was a more realistic figure. Other areas that might result in increased costs were also identified including: administration time for staff to familiarise themselves with the new Code of Practice; amending their landlord contracts and written procedures; and distributing the new contracts to be signed by all clients.

Competition Assessment

5.27 One respondent disagreed with the conclusions of the Competition Assessment section of the BRIA, as it was felt that the proposal would both directly and indirectly limit the range of suppliers and their ability to compete in the market.

Other comments

5.28 One respondent noted that Purpose and Intended Effect section of the BRIA did not include reference to TPOs code of practice. It was felt that this presented an unbalanced view, as the codes of ARLA and RICS were mentioned, and TPOs code already places more obligation on organisations than exists in the proposed mandatory Code of Practice.

5.29 Another respondent drew attention to Option C2 in the Mandatory Qualification section of the BRIA (p.66). This organisation stated that it was the NFoPP, and not ARLA that offered the current qualification on which costs should be based.

5.30 Finally, a tenant/community group organisation made a brief comment that the scheme should incorporate the same rules and criteria that RSLs have to meet.