UKUT Land ruling on the requirement for membership of multiple redress schemes

Since 1 October 2014, a person who engages in either letting agency or property management work must be a member of a prescribed redress scheme for dealing with complaints “in connection with that work” Enterprise and Regulatory Reform Act 2013 (“ERRA”): S83: Letting agency ; S84: property management.

Those who engage in the above works but are not members of a prescribed redress scheme may be served with a fixed penalty notice and local authorities are empowered to enforce this duty through financial penalties of up to £5,000. A person who is given a financial penalty may appeal to the First-Tier Tribunal (“FTT”) – (Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014, S.I 2014/2359.

In the recent case of Newham LBC v Sampson Estates Ltd [2019] UKUT 110 (AAC) Upper Tribunal Judge Levenson, Sampson Estates Ltd was engaged in both letting agency work and property management work. However it was only a member of a redress scheme in respect of the letting agency work. Newham LBC considered that this was a breach of the ERRA and served a fixed penalty notice on Sampson Estates Ltd.

Sampson Estates Ltd went on to successfully appeal the financial penalty to the FTT which held that a person needed to join only one of the two types of redress scheme even if they are engaged in both works.

Newham LBC appealed this decision to the Upper Tribunal, which held that letting agency work and property management work were different and a person who is engaged in both needed to ensure that he was covered by a redress scheme (or schemes) for all the work that he did.

For more information on this recent case, please contact our Housing Management team on 020 8290 0333 or contact us here.