Letting Agent Registration: The Process

  • Insight

12 September 2017

From January 2018, legislation regulating the practice of letting agents will be in force.

Many letting agents will have to register, click here for further information on who is classified as a letting agent. Operating as a letting agent without being registered is punishable by up to six months’ imprisonment, a fine not exceeding £50,000, or both.

This note provides a general outline of the registration process and is intended as an overview only. The Scottish Government guidance – available here – is a useful reference also. For further information on letting agent registration, click here.

What is the deadline for application to register as a letting agent?

Applications for registration must have been submitted by 30 September 2018. The new legislation comes into force on 31 January 2018. It is anticipated that applications for registration will be able to be submitted from early 2018. A fee for registration will likely be payable.

Application Requirements

Before they can accept an application, the Scottish Ministers must be satisfied that the applicant, and anyone else who requires to be entered on the application form, is a fit and proper person and that the training requirements have been met. This applies whether it is a first registration or a renewal (click here to read about Ongoing Requirements).

The Fit and Proper Person Test

An applicant and anyone else who requires to be named on the form must be a fit and proper person to be a letting agent. The Scottish Ministers take a decision on this based on “all the circumstances of the case” but a list of factors which will certainly be taken into consideration is given and includes: conviction of certain offences, practising of unlawful discrimination, and contravention of housing law, landlord and tenant law, or the law relating to debt. For renewal applications, any failure to comply with the letting agent legislation or will be taken into account.

Depending on the circumstances, other persons who require to be named on the application form (and thus who must pass the fit and proper person test) may include – if the applicant is a company, partnership or some other legal body – the most senior person in the management structure, and anyone owning 25% or more of the applicant. For any type of applicant, anyone who is, or who is to be, “directly concerned with the control or governance of the applicant’s letting agency work” must also be named.

Training Requirements

All “specified persons” must undertake training. In many cases, there will be more than one specified person in each letting agency. If the applicant is a natural person (a human being as opposed to, for example, a company), the following are specified persons: (1) the applicant, and (2) each person directly concerned with managing and supervising the day-to-day running of the applicant’s letting agency work.

If the applicant is not a natural person (so is a company, partnership, and so on), the following are specified persons:

  1. the individual who holds the most senior position within the management structure of the applicant, unless that individual has no involvement in the day-to-day running of the applicant’s letting agency work
  2. each individual directly concerned with managing and supervising the day-to-day running of the applicant’s letting agency work and;
  3. if the applicant operates an office where letting agency work is done but where there is no-one fitting the description in (1) or (2), an individual based in that office.

For example: Letting Agent Ltd wish to register as a letting agent. Letting Agent Ltd have three offices. The managing director is in the main office, as are the line managers. The other two offices are small, satellite offices. The people working from these offices have no management responsibility. They are managed by two people in the main office.

Who must be trained? The managing director (unless that person has no involvement in the day-to-day running of the letting agency work), both of the managers in the main office, and at least one person in each of the two satellite offices.

Each specified person must have a qualification at or above, or at an equivalent level to or above, level 6 on the Scottish Credit and Qualifications Framework, and which includes training on seven specified areas. At present, two programmes are described by the Scottish Government guidance as leading to an acceptable qualification. These are:

  1. The LETWELL programme, delivered by Landlord Accreditation Scotland and the Chartered Institute of Housing (CIH) Scotland (leading to CIH level 3 certificate in letting and managing residential property).
  2. Propertymark qualifications (formerly National Federation of Property Professionals) programme (leading to a level 6 technical award in residential letting and property management).

There is also a requirement to take ongoing training. Ongoing requirements are considered in a previous article, Ongoing Requirements.

When will a decision be made?

The Scottish Ministers must determine an application within twelve months of receiving it. Their decision must be notified to the applicant “as soon as practicable”. The twelve-month period can be extended by the First-tier Tribunal, but the applicant must be part of that process.

If an application is to be refused, the Scottish Ministers must send a notice to the applicant stating that they are considering refusal together with their reasons for doing so, and inform the applicant that written representations can be made (with the aim of avoiding refusal) within a specified timeframe. The timeframe will be a period of at least 28 days starting from the day after the notice is given. Again, this applies whether it is a first registration or a renewal. If an application for registration (whether for first registration or renewal) is refused, that fact will be noted on the register for twelve months, but that note will be removed if registration is successfully made afresh within that period.