10 MAR 2018
RICS has sent an invitation to selected alternative dispute resolution (ADR) service providers to tender for ADR services covering surveying services such as home buyer reports, building surveys and valuations.
The selected provider will replace Ombudsman Services (OS:P), which announced that it will no longer be offering ADR services with regard to building surveyors, quantity surveyors, managing agents, estate agents and letting agents, and their services, from 6 August 2018.
Property management, lettings and real estate activities were all activities covered by OS:P, however they will not be included in this tender exercise.
The reason for this is that ADR for property management and lettings requires approval from the Ministry of Housing, Communities and Local Government. ADR for real estate requires approval from National Trading Standards Estate Agency Team hosted by Powys Council. The requirement of these approvals creates barriers to entry that prevent RICS from going to an open tender for all the activities previously covered by OS:P. To date only three organisations have been approved to supply ADR in relation to these activities: OS:P, The Property Ombudsman (TPO) and the Property Redress Scheme (PRS).
The government has launched a consultation into ADR in these areas and will be considering reforming the property ADR environment. While this review is ongoing and the policy position unclear, we believe it is unlikely that new entrants into estate and lettings agency ADR would be approved and it is best that RICS firms register with existing ADR providers.
This means that UK firms that are involved in property management, lettings and real estate will need to apply to either the TPO or the PRS before 6 August in order to be able to fulfil their statutory duty to offer ADR to consumers.
The tender process for ADR in surveying services will identify the best candidate organisation to take on this important role and further announcements on the progress of this process can be expected in the coming weeks and months.
If you have any questions about ADR or the tender process, please get in touch with Mark Boyle.