Energy Performance Certificates – Proposed Changes

Energy Performance Certificates Image

IMPORTANT UPDATE:

In September 2023, the UK Government made significant updates to their over-all targets for Net Zero. Some of our articles relating to energy legislation provide timelines which are now inaccurate. We therefore have an updated summary for proposals and dates mentioned post 2023. For the latest updates, please see:

Government changes to EPC’s and gas boiler legislation – Finch (finch-app.com)

Are your landlords ready to get their Energy Performance Certificates’ Energy Efficiency Rating to a C by 2028?

 

The consequence for non-compliant landlords are financial penalties of up to £5,000 per property. This article is set out to address the up-coming changes within the private rental sector, and advise agents on best practice for their landlords. The penalties are:

  • Renting out a non-compliant property
  • Providing false or misleading information on the PRS Exemptions Register
  • Failure to comply with a compliance notice
 

What’s currently required by the landlord for their Energy Performance Certificates?

From October 2008, properties being let or sold in England and Wales require an Energy Performance Certificate (EPC).

“An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient)” – GOV.UK.

In 2018 a Minimum Energy Efficiency Standard (MEES) was introduced, requiring all properties to be let to meet an energy efficiency band of E. Any properties within the bands of F or G can not be let and need the landlord to take appropriate action to comply. The cost relating to the landlord’s appropriate action has a financial cap of £3,500 and includes actions such as loft and wall insulation, upgraded boiler, double or triple glazing, etc. Beyond this maximum cost, a landlord can apply for an ‘All improvements made’ exemption and will be awarded the EPC to let the property.

Energy Performance Certificates exemptions
- https://www.gov.uk/government/publications/private-rented-sector-minimum-energy-efficiency-standard-exemptions/guidance-on-prs-exemptions-and-exemptions-register-evidence-requirements#all-improvements-made-exemption

2018 saw the MEES applied to the issuing of new certificates. Certificates are valid for 10 years and from the 1st April 2020, this was extended to all existing tenancies. This now means that an EER of E or above is required for a landlord to let their property, or an ‘all improvements made’ exemption needs to be registered.

What is the long-term action plan for Energy Performance Certificates?

An EPC Action Plan was created in September 2020 by the Department for Business, Energy & Industrial Strategy along with the Ministry of Housing Communities & Local Government. The plans laid out by these departments have 2035 as the target for as many homes as possible to have an EER of B and C. Changes were suggested for the Standard Assessment Procedure (SAP) for EPC’s throughout 2022 with an expected roll-out of the consultation in 2028. Topics being consulted upon included:

  • Reducing EPC validation periods
  • Raising the maximum spend landlords are required to invest to £10,000. This initially had the proposed requirements applying to new tenancies from 2025 and to all tenancies by 1 April 2028. But following further consultation and lobbying from Propertymark and the NRLA claiming the date to be unworkable, the deadline of 2025 has now been extended to 2028 (as of 28/03/2023).

Minimum Energy Efficiency Standard Timeline

Energy Performance Certificates timeline

If properties aren’t upgraded, then what?

It is a Government requirement that properties meet an EER of E or better before being let. If the properties aren’t upgraded, and exemptions aren’t requested, then the local authority may issue the landlord with a financial penalty.

Here are the penalties presented on GOV.UK

The maximum penalties amounts apply per property and per breach of the Regulations. They are:

  • up to £2,000 and/or publication penalty for renting out a non-compliant property for less than 3 months
  • up to £4,000 and/or publication penalty for renting out a non-compliant property for 3 months or more
Documentation:
  • up to £1,000 and/or publication for providing false or misleading information on the PRS Exemptions Register
  • up to £2,000 and/or publication for failure to comply with a compliance notice

Maximum amount you can be fined per property is £5,000 in total. – GOV.UK 

Top 3 reasons for properties failing to achieve the required rating to let

There are a few reasons why an EPC rating might be lower than expected. These are some of the major culprits for poor energy ratings:

  • A large portion of walls being poorly insulated, allowing them to lose heat.
  • Similar to the walls, having no or little loft insulation.
  • Poor heating – specifically, having electric-only heating can significantly reduce performance.

Helping your landlords meet the standards

Determining the rating of your landlords EPC is easy through the Find an Energy Certificate portal, where a postcode search will provide the energy rating along with the valid until date. 

It is important to consider your landlords compliance with the up-coming changes around MEES,  proposed reduction for the EPC validation periods and the proposal for the minimum spend to increase from £3,500 to £10,000 before exemptions can be requested.

An example of where a landlord might need guidance

  • The Property is currently rated as an E and needs £3,500 spent to bring it to a C for 2025.
  • Following the £3,500 spent, the property is still only rated as a D, but the ‘all improvements made’ exemption has been granted allowing a certificate to be provided,  the EPC is valid for 10 years, but the exemptions are only valid for 5.
  • In order to begin a new tenancy, the landlord will need to comply with the MEES by holding an EPC for the property with an EER of C or better. As exemptions only last 5 years, the original EER would expire and an amount up to a cap of £10,000 could need to spent to upgrade to a C, before any further exemption can be re-made. 
  • If the property is let after 2028 and the spending cap is raised to £10,000, The landlord may find themselves having to pay an additional £10,000 on top of a recent £3,500 spend for a valid EPC. 

Guide landlords through the changes to Energy Performance Certificates

Using a digital process to manage this for your landlords is the obvious solution, but it will need to go beyond a CRM filing system. For many agencies they will be faced with a large number of landlords, some of these landlords will have multiple properties and all of their EPC’s will have 10 year expiration dates at differing times.

An action plan as an agent could be a written proposal or suggestions list to the landlord to help them continue to let their property over the coming years to educated on the EPC changes and where possible, propose your suggestions on how to navigate these changes most effectively. Summarise the requirements as stated above, specifically highlighting the issues to those landlords who are (or will be) in the wrong band, making sure that they are clear on the regulation changes. 

The best way to achieve this; remind them which band their property is currently in, explain the penalties for non-compliance and importantly, to highlight the potential benefits of moving up the energy rating grades as it relates to sale value in the future. Finally, you may want to point your landlords toward the Governments “Green Deal: energy savings for your home” as well as checking that a Green Deal company they’re using is genuine. 

Ultimately this is all about bringing landlords up to speed and helping them to prepare their properties for the change without falling into any avoidable pitfalls.

With EPC changes still in consultation, sign up and keep updated on all the latest changes 

UK Right to Rent from October 2022

Using innovative technologies to check a tenants’ Right to Rent

According to law, all UK tenants must go through verification by way of Right to Rent Checks. The Right to Rent check was introduced across England in 2016 and includes collecting and verifying documents to confirm that the tenant is allowed to rent within the UK. If a landlord or agent lets to a person who does not have the right to rent in the UK, or if they have not carried out the correct Right to Rent Checks, they can be sent to prison for up to 5 years or receive an unlimited fine. Penalties range from £1000 for a first time offence and £3000 for subsequent offences.

Up until the COVID-19 changes, Right to Rent Checks were required to happen face-to-face, again prescribed by the government. One of the main reasons for this was that both the identity of the prospective tenant and the documents they provided needed to be verified in person.

COVID-19 came with significant and rapid restrictions across all sectors and the property sector certainly took a hit. As a result, the government permitted virtual Right to Rent Checks, but this will be ending soon. The country will be reverting back to a face-to-face process, however for the first time ever, landlords and agents will be able to choose from approved virtual Right to Rent Check vendors to approve a Right to Rent.

The information-gathering needed for British tenants

Once a let is agreed, a Right to Rent Check must take place. The landlord or agent must obtain the documentation to prove their right to rent and should take all reasonable steps to check the validity of the documents presented. The tenant must visit the landlord or agent’s office with original versions of all the document so that in the presence of the prospective tenant or tenants, the relevant checks can be made. The landlord or agent must then conduct laborious checks on each document and create clear copies of the documents in a format which cannot be altered and retain the copy securely: electronically or in a hard copy.

Landlords and agents are required to check the following during the Right to Rent Check, as per UK law:

  • They must check that all the documents provided are genuine, original, unchanged, and belong to the tenant in a face-to-face meeting.
  • They need to check that the dates on the tenant’s Right to Rent in the UK have not expired.
  • Landlords and agents must ensure photographs are the same across all documents.
  • If the documents presented have different names on them, the landlord or agent must receive supporting documents showing why they’re different.

How COVID-19 changed the process of letting to British tenants

When the COVID-19 pandemic hit the UK, harsh restrictions were put in place by the government, including total lockdowns. As restrictions eased and companies could function again, the government made provisions to allow the Right to Rent checks to happen virtually.

The government allowed landlords and agents to conduct a provisional Right to Rent Check via video call, where the tenant was required to hold up their original documents to the camera for verification. It was also permitted that Identification Document Validation Technology (IDVT) could be used to carry out the checks.

What changes post-pandemic?

When restrictions eased completely, and the UK economy settled into the ‘new norm’, the government released new guidance that, virtual Right to Rent Checks were no longer allowed from the 6th April 2022. They stated that the face-to-face process was to be restored.

However, after some consideration, the guidance has changed once more. Virtual Right to Rent Checks are still permitted until and including 30 September 2022. Thereafter, Right to Rent Checks must either happen in person or through government-approved technology vendors.

From 1 October 2022, Landlords and agents can conduct Right to Rent Checks and onboard new tenants remotely through compliant digital trust frameworks. For the first time ever, landlords and agents will be able to conduct the Right to Rent Check entirely remotely.

What changes if I check Right to Rent using a digital trust framework?

The two routes offered for a landlord or agent to check a tenants Right to Rent are; physically in person or by using a compliant digital trust framework. The outcome of both of these routes is the same, neither holds more weight legislatively and ultimately it comes down to the perceived ease for the landlord or agent to make a decision. The digital route cuts out the process of human scanning of documents to verify the key data points, reducing the risk of oversight and error which could lead to civil penalties. It also reduces the time-thirsty process of onboarding tenants, removing those inconveniencies preventing agreements being made in real-time, such as the arranging of a date to bring the ID, as well as travel to get to the landlord or agent.

Who is responsible for these checks?

This is an interesting and important question of liabilities. The landlord is primarily responsible and therefore liable for the Right to Rent Check being carried out correctly. It is their property and they are contracting with the tenant. If an agent has agreed to let the property on the landlords behalf, then the landlord is still liable unless the agent has been appointed contractually to ensure that the Right to Rent Checks are completed and that the checks are compliant. The written agreement must make clear that:
 

This final point is particularly important as the liability, for example cannot be transferred to 3rd parties, such as tenant reference agencies or similar. Neither can the landlord automatically assume that the agent is responsible.

At Finch, we are dedicated to ensuring that these types of considerations are clearly defined and handled within our digital processes provided to our agent customers. Residential agents should ensure that their terms of business documents clearly define who is responsible for correctly carrying out the Right to Rent Checks and where the liability sits. This will help to avoid any uncomfortable disputes further down the line.

UK Right to Work from October 2022

Using innovative technologies to onboard British employees

According to law, all UK employers must complete right to work checks for new British employees. The right to work process includes collecting and verifying documentation for an employer to confirm that the job applicant is allowed to work for them. In fact, employers can face a civil penalty if they employ an illegal worker or have not carried out the correct right to work check.

Until now, interviews with potential candidates and right to work checks were required to happen face-to-face, again prescribed by the government. One of the main reasons for this was that both the identity of the applicant and the documents they provided needed to be verified in person.

During the restrictions put in place as a result of Covid-19, the government permitted virtual right to work checks, but this will be ending soon. The country will be reverting back to a face-to-face process, barring a few approved virtual right to work check vendors.

Using innovative technology, we have developed an app that we believe will streamline and improve the onboarding process for British employees.

The information-gathering needed for British recruitment

After a face-to-face interview and if the applicant is successful, a right to work check must take place. The successful candidate must send the employer documentation to prove their right to work. The applicant must then visit the employer’s office with original versions of all the documents previously provided, and the employer must then conduct laborious checks on each document.

Employers are required to check the following during the right to work check, as per UK law:

  • They must check that all the documents provided are genuine, original, unchanged, and belong to the applicant in a face-to-face meeting.
  • They need to check that the dates on the applicant’s right to work in the UK have not expired.
  • Employers must ensure photographs are the same across all documents.
  • They need to check that the applicant has permission to do the type of work offered, including any limitations on the number of hours they can work.
  • In the case where the applicant is a student, the employer must be provided with evidence of their study and vacation times.
  • If the documents presented have different names on them, the employer must receive supporting documents showing why they’re different.

Perhaps the most frustrating part of the right to work process for both the employer and the new employee is that if any step in the process is missed or occurs incorrectly, the process has to start over from the beginning.

How Covid-19 changed the onboarding of British employees

When the Covid-19 pandemic hit the UK, harsh restrictions were put in place by the government, including total lockdowns. As restrictions eased and companies could function again, the government made provisions to allow the right to work checks to happen virtually.

From 30 March 2020, the government allowed employers to conduct interviews virtually via video call platforms like Zoom or Microsoft Teams. They were also permitted to conduct a provisional right to work check via video call, where the applicant was required to hold up their original documents to the camera for verification. It was also permitted that Identification Document Validation Technology (IDVT) could be used to carry out the checks.

However, employers must still conduct a face-to-face verification of the applicant’s documentation as soon as possible following the remote check. Following the end of temporary Covid-19 measures, a deadline will be enforced for right to work checks conducted provisionally to be completed either in person or using post-pandemic rules.

What changes post-pandemic?

When restrictions eased completely, and the UK economy settled into the new norm, the government released new guidance that, from 17 May 2021, virtual right to work checks were no longer allowed. They stated that the face-to-face process was to be restored.

However, after some consideration, the guidance has changed once more. Virtual right to work checks are still permitted until and including 30 September 2022. Thereafter, right to work checks must either happen in person or through government-approved technology vendors.

From 1 October 2022, employers can conduct right to work checks and onboard new employees remotely through complaint digital trust frameworks. For the first time ever, employers will be able to conduct the right to work check entirely remotely.

How a Right to Work app changes employee onboarding

We have developed an app that we believe is the perfect alternative to face-to-face and video call right to work checks. The face-to-face process is archaic and unnecessary, and holding up documents on a video call is a risky way to verify someone’s right to work information.

The Right to Work app is an innovative remedy as it allows for the entire right to work check process to happen virtually on one secure app. Right to Work is a fully digital, remote complaint solution that allows for the right to work check to happen virtually. It also ensures that every step of the right to work check is completed in full and accurately, preventing the employee and candidate from starting over again as mistakes won’t be made – this ultimately saves time and money.

Right to Work allows employers to provide successful applicants with their job offer, letter of employment, and contract – which they can sign electronically on the app. All records of the documents in the right to work check process are stored safely in our vault, which can be accessed by HR.

You’re also able to verify bank details for payroll, capture ID in a compliant way with the UK digital trust framework, and have all documents signed electronically.

Staying on the right side of the Property Ombudsman

Yesterday the Property Ombudsman released their annual report covering the 2020 calendar year, the full report can be found here, the headlines are as follows.

  • Enquiries increased year-on-year with a record 39,285 reported, up 29% on 2019
  • 5122 of the enquiries received were accepted as complaints, up from 5106 the previous year 
  • 2473 complaints resulted in a financial reward  
  • Agents were instructed to settle total claims of £1.9 million
  • Highest award paid by a sales agent £24,139
  • Highest award paid by a lettings agent £20,838   
The above represents just a fraction of the amounts being paid out by agents due to non-compliance or poor practice. Agents are regularly falling foul of the AML & KYC regulations resulting in four figure fines  or in some cases much higher as this article highlights. 
So why are agents hard earned fees being eroded in this way?

Whilst the larger independent and corporate agents will have dedicated compliance departments a large proportion of the 25,000 plus estate agency businesses in the UK do not. Small business owners ware many hats and even with the best of intentions compliance is sometimes overlooked. It’s easy to understand due to the sheer volume of regulation. A recent study identified that lettings agents alone collect in the region of 110 data points just to get a property on the market, much of which falls under regulation ranging from KYC to the consumer protection act. If the agent then goes on to let the property and manage it as well the compliance burden continues to grow. The following is a list of the legislation (not exhaustive) that agents need to be aware of .

  • Consumer Protection from Unfair Trading Regulations 2008
  • Estate Agents Act 1979 + Regulations
  • Money Laundering Regulations 2017
  • Consumer Contracts (Info, Cancellation and Additional Charges) Regs
  • The Property Ombudsman Code of Practice
  • Companies Act/Business Names Act 1985
  • The Energy Performance of Buildings (Certificates and Inspections) Regs
  • Data Protection Act 1998
  • Electronic Commerce (EC Directive) Regulations 2002
  • Town & Country Planning (Control of Advertising) Regulations
  • Unfair Terms in Consumer Contracts Regulations 1999
So where are agents falling down?

It seems many agents are getting into trouble right at the start of their relationships, with complaints relating to instructions/terms of business featuring second on the list for sales agents and third for lettings agents, with poor communication and record keeping coming in first and second respectively.

The importance of ensuring that T&C’s are clear and relate specifically to the customer and their specific circumstances can not be overstated. In addition gaining approval for agent produced marketing collateral is a must, it’s sometimes seen as an irritation and a delay to getting a property on the market but it is certainly best practice and a requirement for those agents who are Property Ombudsman members.

Is Tech the answer?

Tech can certainly help, there are a variety of great solutions available that can assist the agent / client relationship right from onboarding through to end of tenancy or sale completion. The key is ensuring you know your obligations and then choosing the most suitable solutions for your business.

Best Practice

An array of compliance tech will help but will not keep an agent safe if used poorly. 

More and more agents are now looking to protect their position by not only making sure their teams receive the required training, but also ensuring they provide adequate instructions to ensure their team knows what to do, how to do it and when to do it.

To do this correctly, professionally and provide the required due diligence audit trail, agents need written instructions and this is best done by means of a Compliance Manual. This will combine a list of the legal obligations with the what, how, when. When creating such a document a review of the following items is recommended. 

  • Registrations
  • Terms of Business
  • Standard Letters & Documents
  • In-house Procedures
  • Websites
  • Advertising
  • Auditing property files

This may sound daunting especially for those smaller businesses without dedicated compliance teams but as the fines show the regulators have teeth, so it’s probably a false economy not to have a formal compliance regime in place.  

Getting Help

Staying compliant is a considerable task and one that is only set to grow. For those that have the time there are plenty of resources on line, Propertymark and The Property Ombudsman also offer comprehensive compliance services to their members.

For those who are perhaps looking for something more interactive consultancies such as EA Compliance can provide a bespoke service ranging from answers to a specific question to a complete compliance heath check.

Portal Wars – Do the public really have the appetite?

It’s just over four month’s since three became four and Boomin joined the ongoing struggle for agent and consumer market share. Having worked for a major Proptech CRM supplier for the majority of the 2010’s I saw up close and personal the battle between the big two Zoopla and Rightmove and the emergence of the third player, On The Market. 

As Managing Director at Finch I’m focused on improving the quality of data collected by agents. Some of that data collected from landlords and vendors goes on to feed the property portals – and so the quality of the property listings on websites like Rightmove is directly correlated to the original quality of the data supplied. As we build our latest workflow “marketing collateral approvals”, I put myself in the place of an applicant looking to buy or rent and went online.

The first question that crossed my mind was “do the public really have the appetite for a forth portal and will it improve their experience?”

I’ve summarised what I found and provided my conclusions and I’d be interested in your view, if you would like to leave a comment you can find me over on LinkedIn

As the table above shows Zoopla provides the best overall experience but of course Rightmove still carries the most properties which is the main reason the consumer is there in the first place. As the most mature platform it’s surprising Rightmove’s offering is still much the same as it was five years ago. Why? 

One of the challenges faced by all the portals is getting the data they require from the agents. In its infancy Rightmove created a data feed specification (ADF) which soon became the de-facto standard for third party systems needing to upload data to property portals. Zoopla did eventually release their own data feed specification but to all intents and purposes the data collected by the portals from agents is the same and hasn’t changed dramatically year on year. One of the reasons for this is the costs involved in changing the data feed contents. Once agreed Proptech CRM suppliers then need to update their software to 1) hold the data and 2) include it in their feeds. One of the most high profile changes to portal data feeds in recent years were the alterations required to cater for the Tenant Fee ban which came into force in June 2019. As can be seen by this article in Property Industry Eye some agents are still getting into hot water two years on.

The key point here is that portals will be reluctant to force feed changes on agents because of the potential disruption and cost and rarely do unless required to by legislation. It’s a risk for the portal especially the newer entrants who don’t want to put obstacles in the way of an agent joining or staying with them. 

So the portals are generally speaking working with similar data, how are they performing?

I found my self frustrated with the lack of uniformity in where data was displayed and how it could be filtered, not just across the different portals which is to be expected but within the same portal. This in a lot of cases is because there are not always specific locations for a data point, so the agent will just use a general text field such as property description or bullet points. 

As an example if I wanted to restrict my search to Freehold properties the only way to achieve this was via a keyword search which returned sketchy results at best. Whist on the subject of tenure I found no formality in the way remaining lease lengths were communicated. To me this is an important data point especially when evaluating the price being asked for a property. Some would simply state lease = 99 years, others lease remaining 99 years. Without knowing when the lease commenced both statements are meaningless. Tenure is just one example, generally I came away underwhelmed with the searching experience.  

Basics not Gimmicks. With the arrival of Boomin we now have the option of signing up for “Secret Property” alerts. This feature provides access to properties that are being valued but are not yet on the market. Personally I’d rather spend by time looking at properties that have actually been instructed rather than those that might come to market or of course might not!  

For the consumer the ideal scenario would be a single portal being feed all available property. Portal aggregators such as www.nestoria.co.uk have attempted to provide something similar but of course do not carry stock from all the major portals so in essence it’s yet another portal for the consumer to register with showing very few unique properties.

Conclusions

Do the public really have the appetite for a fourth portal? In my view no.

Whist the consumer utopia of a single portal is unrealistic perhaps the best we can hope for is a merger between OTM and Boomin. If the combined millions they are currently spending on competing platforms were combined they should be in a position to provide a real third choice. This in turn should drive up standards and innovation providing real competition for Rightmove and Zoopla.  

How do I choose the best Electronic Signature technology for my property business?

Foreword

A couple of weeks ago I published an article, where I discussed the top 5 reasons why using Electronic Signatures (E-Sigs) in your property business can make document processing a breeze. If you haven’t yet decided to use an E-Sigs platform, I’d recommend giving it a read before continuing with this article.


The main event

In this week’s article, I want to focus on supporting the ~70% (according to our latest survey of 200+ ARLA members) of property businesses that have already chosen to use an E-Sigs platform. Just because a majority of the industry has upgraded their document signing process to digital ones doesn’t mean that those businesses have necessarily chosen the right platform for their use case, and certainly doesn’t guarantee that the technology has been properly integrated into their daily processes.

Therefore, let’s discuss some of the drawbacks of the market-dominating major platforms, and some considerations that your business may want to take into account when next renewing your subscription with them.


What and who to look out for in the Electronic Signing space

The subscription based E-Sigs market hasn’t been around all that long, but there are dozens of solutions out there, each with their own spin on essentially the same product. Choosing which to go for can be a bit of a minefield, but the most important criteria to look out for (in my opinion) are; user interface, automation capabilities, reliability of service, and pricing model.

Climbing to the top of the pile are a few names that have dominated the market and gained the business of many property giants; DocuSign, Adobe Sign, Panda Doc, and Sign Easy. All for good reason, they’re strong tools that can solve the basic problem of moving paper documents to digital ones. However, regardless of the provider you choose to service your document signing needs, there is a common thread of issues that plague the industry and its incumbents today…


3 drawbacks of Electronic Signing with the major brands

I strongly believe that many E-Sig platform customers have put up with the following issues because they either; (1) Have managed to find work-arounds that effectively unravel many of the initial efficiency gains found when moving from paper signatures to E-Signatures, or (2) Simply don’t know that there are other options out there, and have stuck with what they know whilst the E-Sigs proposition has progressed significantly around their chosen solution.

Here’s the 3 drawbacks as I see them:

1. Lack of high-quality integrations and raw data capture

 The DocuSigns of this world are building a brand in their own right, and therefore have a vested interest in promoting their platform whenever an envelope is sent for signing. This means that your customers will often need to interact with ‘the DocuSign platform’ as a separate process to the rest of your customer journey, and that can cause confusion, frustration, and a watering-down of the customer experience you are trying to offer.

In our research, and through conversation with our property industry clients, we’ve also found that most E-Sig solutions don’t play well with other systems (in tech terms – their API isn’t easy to work with). This means that 2-way integrations are challenging to build, and therefore the delivery of the underlying field data back into your CRM isn’t always possible. In many cases, the only data points provided to you as a customer is the signed document itself, and the interaction history.  Typically, API access is also charged in addition to the platform costs too.

But what if we also want to grab the raw data points that were inserted or changed within the document by the recipient? Electronic signing platforms are wholly focused on “the envelope”, and only have a generic interest in the underlying data in order to execute that document signature – they lack an understanding of the context of the business transaction occurring.

The Finch response

We believe in putting your brand first by using digital processes that are defined by you, and that your customers’ experience should be as simple and frictionless as possible. To that end, we can integrate Finch into your existing systems and processes so that your customer uses only one platform from end-to-end to provide data and sign documents. 

Our platform is customisable not only in terms of the way in which the workflow is presented, but also in terms of the branding used (so it appears to be an extension of your current system). We also ensure that every piece of data provided along the way is stored as a raw data point, ready to be ported back into your CRM or central IT systems for analysis and compliance purposes via seamless integrations.

2. Lack of ability to merge docs ‘on the fly’

Currently in most E-Sig platforms, the electronic document is just that – an electronic version of the previously paper-based document. This means that the initial data, that which is already known to the agent, is filled in and assumed as correct. They will also mark out areas of the document (fields) in which the recipient/customer can fill in specific data. 

But what if the recipient disagrees with the initial data pre-filled by the agent? Or the field data provided by the recipient would drive the selection (or deselection) of certain clauses of the document? As it stands in these situations, the document would need to be rejected, prepared a second time, and reissued with the corrections – all of which wastes precious time and frustrates both the agent and recipient. It also costs money every time a new envelope is sent, as most solutions charge on a per-document basis.


The Finch Response

We think that there are much more modern approaches to creating and signing an Electronic Document. Just because the data will end up in a traditional PDF format doesn’t mean it needs to be filled and executed in that format on the screen, so we use our data capture workflows (a series of configurable questions), the answers to which to drive the data that subsequently appears in the document for signature. Therefore, if your customer answers ‘No’ to the question “Would you like to subscribe to our rent protection service?”, then the clauses relating to rent protection will simply be removed and replaced with a simple statement of non-provision. 

We also allow documents to effectively be issued partially complete, with the ownness on the recipient to provide specific data fields. This offers huge time-saving benefits to both the sender and the recipient, cutting out the back and forth of email communications and eliminating 90% of the issues that typically cause the cancellation, correction, and re-issue of electronic documents. It also avoids the transactional cost of re-issuing, as a cancelled envelope is still charged for by all E-Sig platforms.

3. Lack of pricing model transparency

Using DocuSign as a prime example, they have multiple tiers to which a user can subscribe; Personal, Standard, Business Pro, and Advanced. Each of these come with a set number of envelopes which can be issued per month, and varying features and service levels. But what if you want to send a low volume of documents (say 5 per month), and take advantage of some of the more advanced automation and branding options? Well, your effective per-envelope cost can jump from £1.50 a document on the Personal plan to £4 per document on the Standard plan.

Beyond the transactional costs, there’s also the often overlooked resource costs on your IT team to get the system effectively integrated and working correctly, as well as getting the workforce trained on how to use it properly.

The Finch Response

Our pricing principle is simple – workflows will only ever cost a maximum of £1.30 per E-Sig document, and that’s if you were to use just 1 per month. As you send and receive more signed documents, your per-unit cost decreases as a thank-you for your loyalty. No hidden costs, no features being locked behind a certain type of subscription – you’ll get access to the same features and an independent 1-brand business as you would if you were the largest national agency.

On top of that, you can pay after usage and only pay for exactly what you use, so no more loss of credits at the end of the month because you had a slow period.

As part of our onboarding process when you sign up to Finch, your team will also receive full training on the solution. And due to the bespoke nature of how we build your workflows, it’s likely that your Finch E-Sig process will be very similar to your previous process, meaning staff can pick it up quickly and start using it on day one!


Want to find out more about how Finch is changing the E-Sigs game?

Our Electronic Signing functionality is, in our humble opinion, the next generation that will change the way that the DocuSigns, Adobe Signs, Panda Docs of this world will need to progress to keep ahead of the curve. If you’d like to see it in action, and understand how we could replace your existing supplier at a highly competitive rate, feel free to reach out to myself – tom.parker@finch-app.com

And as always, we welcome your thoughts and feedback over on our LinkedIn page.

The advent of E-Signatures makes processing agreements a breeze

The world of legal authorisation via signatures has changed dramatically over the last 10 years across all industries. For a time, UK laws and regulations in the property market held back the pace of change for us, as certain documents and authorisations were still required to be done in-person, or physically ‘wet-inked’. However, this has progressed and recent regulations (eg. within conveyancing) now enable us to perform the vast majority of all legal authorisation processes online. This is also stretching to digital ID verification too, which means we aren’t too far from the new normal for property purchases and rentals being a fully remote and digital experience.

In our conversations with estate agencies and property management firms in the UK over the last year, we’ve found that most (~60%) agencies are now using some form of electronic signature (e-sig) platform to execute legal documents, either as part of their CRM, or as a standalone service. This was also confirmed by a recent survey we conducted on LinkedIn with ARLA members. Those remaining ~40% of agencies who aren’t using e-sigs are, on the whole, at least using PDFs attached to emails rather than sending letters in the post (the ‘old-school’ way).

The downsides of executing legal document authorisation, using either of the above methods, are well recorded online – I highly recommend that you read this tongue-in-cheek article that covers the topic better than I could myself.

So today, I wanted to highlight… 

The top 5 advantages of e-sig platforms

 

1 – It’s paperless!

This means documents can be signed anywhere, any time, and on any device. It also means multiple people can interact with the document at the same time, and usually they’ll be able to see the actions of other viewers/signers (meaning multi-signatory documents don’t need to be passed between co-owning landlords, for example, without the risk of papers being lost or duplicated).

2 – There’s a significant cost reduction.

By not having to send paper all over the country (and indeed the world, for larger agencies and those specialising in overseas buyers or investors) you’ll be saving on printing, scanning, storage, postage, and myriad other costs. Another aspect often overlooked is the cost of the time it takes to administrate traditional paper document signatures – every hour spent waiting around for the printer and sticking postage stamps on envelopes adds up to reduce your margins! Finally, the reduced environmental impact to our planet is huge, especially when we consider that, even today, there are still an estimated 20 million trees being cut down in the USA alone to make paper for business purposes.

3 – It provides an auditable central document repository.

With everything being transacted (sent and received) digitally, multi-branch agencies can conduct work between offices more efficiently and share documents instantly, knowing there is a central repository that is consistently tracking all activity. This historic record of activity is therefore auditable and compliant with current data availability and retention regulations.

4 – It’s more efficient and promotes data accuracy

By building a guided user journey (including signposted prompts and instructions) around the document and signing process, electronically signed documents often result in fewer input errors at the sender and receiver’s end. The ability to flag and quickly correct any mistakes also reduces the back-and-forth of old, having to create new copies and wait for fresh paperwork to be issued. Research also shows us that there is, on average, a decrease in turnaround times of 32%, meaning more documents/agreements can be executed in the same period of time and the overall legal process has increased velocity.

5 – It’s more secure

There are multiple levels of security that can be enforced in an electronic signing process, meaning the type of authentication required can be matched to the specific use case in hand. This results in a stronger level of authentication (known as ‘qualified’ or ‘advanced’ signatures) for critical legal documents, reducing the opportunity for fraud and identity theft. It also means that for more common processes, for example those that simply require a declaration of acceptance, a lower level of authentication can be used which is quicker and easier for the user (known as ‘simple’ signatures). E-sigs are also globally recognised under legal frameworks and standards, meaning you can issue them almost anywhere in the world and know that your signature constitutes a binding legal agreement.

Finch provides a mobile-first electronic signing user experience, supporting pinch and zoom and landscape viewing

If you are considering upgrading your current document signature process to incorporate electronic signing, you might want to consider Finch’s own e-sig tool. We built the platform with property use cases in mind, so not only do we functionally execute the signature, but we also have some smart features such as ‘just in time’ data merging, multi-tenant and multi-landlord functionality, and the ability for recipients to supply information alongside the submission of a document (in the same workflow).

If you’d like to find out more about our solution, or generally get some advice on how to digitally optimise your processes, you can book a call with us using the button at the top of this page. Or, feel free to reach out to me directly via email – tomparker@finch-app.com

You can also join the conversation over on LinkedIn with our MD, Rob Chapman.

Open Banking brings new efficiencies to the UK property market

The property industry has been criticised on occasion for lagging other industries in the adoption of new technologies. In KPMG’s 2019 Proptech survey, the author commented that “compared to other sectors, real estate is a dinosaur when it comes to evolution” and that “the challenge for the property sector is to mobilise its technology strategy quickly enough to manage change”.

However, in recent years, the introduction of Open Banking technology has started to make a real impact on the way in which properties are bought and sold, rental monies are transferred, and estate agents collect their fees. As Tom Walker, co-founder of StuRents, commented; this technology revolution is sorely needed after the “2018 card fee ban, coupled with the recently introduced ban on tenant fees [in 2019]”, with a whole new emphasis being placed on the “need for cost-efficient and frictionless payment mechanisms” in order for the businesses to retain their margins after these regulations took effect.

When we add the pressures of Covid-19, the sudden and necessary move towards virtual viewings, resulting in a lack of face-to-face interactions between agents and their customers, and new regulations that allow fully remote document validation, we are now in a situation where the addition of frictionless banking technology is almost a must-have in order to ensure agents can keep on top of the ever-changing landscape.

Not only this, but the virtues of Open Banking stretch far beyond necessity. When implemented correctly, it can also help to prevent and reduce ‘unauthorised remote banking fraud’, which has been steadily rising over the last few years according to UK Finance. In the first half of 2020, financial losses (£) from fraudulent activity in the UK increased by 21% compared to 2019, and the number of reported fraud cases increased by 59% over the same period.

Internet banking related fraud, in particular, has risen sharply over the last few years. Source: UK Finance

This tells us two things; 

Firstly, remote fraud (defined as fraud being conducted over the internet, email, and phone) is becoming an ever-present issue across all sectors in the UK, including the property industry. 

Secondly, the fraudsters are targeting smaller businesses and individuals on a more regular basis, for smaller amounts of cash. This means that your customers, and your agency, are ever more likely to be targeted. And unfortunately, “In the first 6 months of 2020… only £6.95 in every £10 of attempted fraud was prevented… equating to a total of £181.5m”.

There are also ways that monies can disappear into the wrong account through non-fraudulent activity. Simple human error accounts for as much as 49% of all incorrectly transferred data between two IT systems or programmes. So there is a real risk that when the bank details of a tenant or landlord are exchanged via email or over the phone, and the agent keys that data into your CRM or accounting system incorrectly, the rent or move-in monies could end up in the wrong place.

The fact that banks are typically able to recover 98% of fraudulent and incorrectly directed funds back to the sender (according to UK Finance) shouldn’t be an excuse for us not to take this issue seriously, though. The amount of admin required from your accountancy team, or agents, to contact the bank and inform your customer can really pile up – all time which could be better used to market more properties and help customers find their dream home (what an estate agent should be doing 100% of the time, if they could!).

Finch captures bank details using Open Banking, without your customer manually keying in sort codes and account numbers

Open Banking can help us solve all these problems, and more. As Alexander Badalyan from Mashroom rather nicely summarised; “Collecting rent has always been a tedious manual process with high processing costs. State-of-the-art [Open Banking] technology means we can provide [secure and] compliant access to banks for data and payments requests”. 

At Finch, we’re exploring Open Banking enabled payments to do exactly this. The tech also allows us to draw down information about the account holder’s identity and their balance and transaction history. This means agents can quickly and securely understand whether the customer is who they say they are, and whether they can actually afford the purchase or rental they’ve applied for.

On top of this very functional application, the integration of Open Banking into customer-facing processes also makes things quicker, easier, and improves customer experiences. Token co-founder and CMO, Marten Nelson, recently stated in an interview that “Open banking is not just about banking and financial services; it is about democratizing access to data to create better digital experiences that can supersede outdated and expensive processes”. 

We couldn’t agree more, and this is exactly what we’re doing at Finch. You can check out the video on our homepage which gives a 2-minute overview of how we have delivered a truly modern and seamless customer experience by bringing Open Banking and other technologies to the UK property industry.

We’re really excited about further developing the Open Banking tech within the Finch platform and welcome feedback from our partners and customers. Have you experienced any of the issues highlighted in this blog post? Or perhaps you’ve got some ideas about how we could reduce financial administration and improve customer data collection processes in your business? 

Drop me an email to discuss it further; tomparker@finch-app.com

Or, join the conversation with our MD, Rob Chapman, over on LinkedIn.