Every estate agent doing sales work anywhere in the UK, and every letting or property management agent in England, must belong to a government-approved redress scheme. The sales requirement has been in place since 1 October 2008 (Estate Agents (Redress Scheme) Order 2008, under s.23A of the Estate Agents Act 1979). The separate lettings and property management requirement dates from 1 October 2014 (Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc.) (England) Order 2014).
There are currently two approved schemes: The Property Ombudsman (TPO) and the Property Redress Scheme (PRS).
Redress duties differ for sales and lettings. The duty on estate agents doing sales work to belong to an approved redress scheme applies across the UK (Estate Agents (Redress Scheme) Order 2008, under an Act that extends to Northern Ireland). The equivalent lettings redress requirement is an England measure; Wales regulates letting agents through Rent Smart Wales and Scotland through its Letting Agent Register and Code of Practice. Check the current position for your nation and type of work.
Why Membership Is Required
Redress schemes provide consumers with a free, independent alternative to court action when they have a complaint about an estate or letting agent. Sanctions differ between the two regimes. A letting or property management agent in England operating without membership faces a penalty of up to £5,000 from the local authority; a sales agent falls under the Estate Agents Act 1979 warning and prohibition-order regime instead. Check the current position with your local Trading Standards team.
The Property Ombudsman (TPO)
TPO is the longer-established scheme and has the larger market share. Key features include:
- Covers sales, lettings, commercial, and auctions
- Agents must comply with the TPO Code of Practice
- Can award compensation of up to £25,000 per case
- Annual membership fees based on the number of offices and whether you handle sales, lettings, or both
- TPO decisions are binding on the agent but not the consumer - the consumer can still pursue court action if unsatisfied
Property Redress Scheme (PRS)
PRS is the newer alternative. Key features include:
- Covers sales, lettings, and property management
- Agents must comply with the PRS Code of Practice
- Can award compensation of up to £25,000 per case
- Generally lower annual fees than TPO, particularly for smaller agencies
- Offers a simpler, faster complaints process
Which Should You Choose?
Both schemes fulfil the legal requirement. Practical considerations include:
- Cost - PRS tends to be cheaper for single-office independent agents. Compare current fee schedules directly, as they are updated annually
- Reputation - TPO is better known among consumers, which some agents see as adding credibility
- Code of Practice - both codes cover similar ground but differ in some details. Read both before deciding
- Existing membership - if you are already a member of a professional body like Propertymark (ARLA/NAEA), check whether your membership includes or discounts one scheme
You only need to belong to one scheme, not both. You can switch schemes at renewal if you wish.
What Agents Must Do
- Display your redress scheme membership prominently in your office and on your website
- Include your membership details in your terms of business
- Follow the scheme's Code of Practice in all dealings
- Co-operate fully with any complaints investigation
- Comply with any awards or directions made against you
Membership of a redress scheme is a legal requirement. If you are setting up a new agency, join a scheme before you begin trading. Details of current fees, codes of practice, and application processes are available on the TPO and PRS websites.