Representatives of the Office of Fair Trading (OFT) are a necessary evil. They are needed to keep the various industries they regulate clean and tidy. Bad apples ruin it for everyone, so when they come knocking, don’t be afraid, just be ready.
For the last few months we have been contacted by more and more clients about spot visits conducted by the OFT. They usually are looking for what they call the ‘big four’:
- Your licence on ‘conspicuous’ display (above the front door is the traditional spot – but it can be elsewhere. It just must be visible when people enter your premises);
- Your licensee name and category printed in font 1.5cm high on display;
- A statement that you are subject to a Code of Conduct (click herefor the Code) and the fact that is available; and
- A simple and easy to use complaints resolution policy in place (but not necessarily on show). If you need one of these let us know.
Leaving aside those simple ones, the OFT has a mandate to make sure that you are conducting your letting business in accordance with law. Some of the more common issues that we see arise in an audit are:
The right entity – All PAMDA20A’s must be in your name or the prior ones must be legally assigned to you. Yes, we bang on endlessly about that, but it is important – you cannot let a lot (or charge a commission) without a written agreement from the owner of the lot;
- The right charges– Make sure that everything you are charging is listed in your PAMDA20A. If not, you need another written authority to raise those charges (like a separate written agreement);
- Licence conditions– Make sure you are adhering to any conditions of your licence (i.e. for a resident letting licence – that you are actually residing on site);
- Staff licencing– If necessary, make your staff also licenced as required; and
- Audits– Make sure you have had all your statutory audits.
Remember that the OFT only regulates letting. They have nothing to do with caretaking. You won’t ever get them chipping you about not maintaining the lawns or hosing the driveway.
If you do get a visit, some simple rules for dealing with the OFT are:
- If they do drop in for a spot check, answer their questions honestly. Having said that, don’t be afraid to tell them you need to seek legal advice (especially if you are not sure about your position).
- It follows that you should never, ever lie to them.
- They can require you to (within a reasonable period):
- Produce documents about your letting activities (ie. PAMDA 20A’s, copy of your licence, trust account documents); and
- give information about an offence if they believe on reasonable grounds that an offence has occurred.
A failure to provide information as required is an offence that could lead to a fine or, at worst, imprisonment.
- You are entitled to seek legal advice to assess your position, but you should do that immediately. Do not get caught thinking as that makes you look guilty – it is a right you are entitled to, and our experience is that it is far better to give a considered response than a haphazard guess.
- If you do get formal correspondence from the OFT, then seek immediate legal advice. Sometimes the issues can be resolved quickly and painlessly but sometimes you might need to prepare for a fight.
- Do not ignore their follow up correspondence or emails. They are not like a salesperson – who might get discouraged by someone failing to come back to them. They simply won’t let go – and ignoring them is a sure-fire way to stay on their radar.
If you need help we can assist.