The PRS is one of three consumer redress schemes authorised by the government whose role it is to provide fair and reasonable resolutions to disputes between members of the public and property agents. By law, all agents must be a member of one of these three schemes.
The number of complaints raised with the PRS is increasing month on month. Of the complaints raised so far, 44% were by landlords and 41% were by tenants, with the remaining 15% being raised by buyers and sellers of property.
The complaints have varied widely in content, with the top three grievances being unfair or excessive fees at 21%, non return of holding deposit at 18%, and perceived poor service or lack of communication at 18%.
Agents are also resolving complaints directly with consumers when they are notified of the issue proving that the PRS is having a positive effect on service offered and that some complaints can arise from simple miscommunication between parties.
Grounds for non-acceptance of complaints have included consumers that had not yet attempted to raise a formal complaint with their agent but had instead gone direct to the PRS. Others were declined as the complaint involved on-going court action.
An example is a landlord who served notice on her agent two months before the end of the tenancy. The agent acknowledged this notice but pointed out that a charge would be made for withdrawing from the agreement, as per the terms of their contract.
The agent claimed that this charge was because they had found the tenant that rented the property. As the initial introduction of the tenant retains value, the agent believed they would be materially disadvantaged if the tenancy was renewed under a different agent and wished to seek compensation for this introduction.
This information was supplied to the landlord via email but was only received weeks later when the landlord found in her junk email folder. Her lack of response was taken by the agent as tacit agreement and they proceeded by withholding this fee from the last month’s rent.
The landlord contacted the agent to explain that she had in fact sold the property and therefore the tenant was not remaining in the property after the expiry of the tenancy. She debated this fee and made further claims that the terms of their agreement were contradictory.
However, the agent maintained they would still be applying what they saw as legitimate charges for the cancellation of the agreement. This resulted in a breakdown of communication between the landlord and agent, with both seeking legal representation to try and resolve the issue.
Following a thorough review of all the evidence provided, the Head of Redress concluded that it was the intention of the landlord to terminate the arrangement following the vacation of the tenant and to sell the property. As the tenant did not remain in the property, the introduction did not retain a value and did not entitle the agent to a fee. In addition, the agreement terminated naturally and the withdrawal fee for cancellation was not appropriate.
This being said, the Head of Redress pointed out that the landlord had not assisted the process by clearly explaining her reasons for termination and to clarify that the tenancy would not be proceeding after the expiry of the agreement. She also confused the issue of the unfair fee by introducing the issue of contradictory clauses in the agreement. As she had willingly entered into this agreement and no objections had been made at the time this was signed, this only served to break down communication further.
Though this could have prevented the situation from becoming fractious, the agent was not able to prove that they had been materially disadvantaged by the landlords. As such, the Head of Redress instructed the agent to return the withheld monies.
‘In order to withhold money, an agent must be able to prove that they have been materially disadvantaged and that any losses incurred are a direct result of the complainant’s actions. Many disputes can be resolved without the need for redress scheme involvement if both parties communicate well with one another,’ PRS spokesman said.
