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Thursday, October 20, 2011

Letting agent - a warning!

This is the case experienced by one of our landlords highlighting some of the problems of employing a letting agent and assuming that they always have your best interests at heart.

Post a comment if you have a view or any advice for our unfortunate landlord.

"I'm a fan - have been using Property Hawk for some time as a very small landlord - just 2 properties!

I wondered if you'd be interested in discussing my story - or publishing a warning - or helping me (quite desperate now!)

I have been using an agency for 2 properties. My query is linked to both of them, but predominantly property A.

The tenants at Property A had arrears of c£1000, so after (bad) advice from my agency I gave them 2 months notice (good advice would have been to go down the fast track route, but my agency advised it would be easy to get my arrears back if I took the longer route). This left me with £2,000 of arrears - and £5,000 of repairs to the property (for which I'm trying to pursue the tenants via the small claims court as a matter of principle!)

The deposit on Property A was £625. The tenants pushed a note through the agency doors, with the keys, advising that the deposit should go towards the arrears.

I've been pursuing the agent for the last 2 months to try and get the deposit returned to me. £625 is a lot of money, especially with the total loss of £7k on the property - plus I am not a large landlord - the property is the first house I bought on my own and so the emotional burden has also been huge. It is a typical case of keeping in in case of separation from my husband when we moved in together!

The second property, Property B, was an investment - not a wise one! - and one that doesn't make money. This was again let through the agent, however, after a catalogue of problems with the management of the property (including not renewing gas safety or sorting out fixing a faulty gas cooker!) I decided to work directly with the tenant and manage the property myself. They are happy with this as they have also been frustrated with the agent.

I therefore gave notice to the agent that I would start managing this property directly, via email, on 11 September. After no reply I emailed again on 19 September (as I was on holiday). I then spoke with the DPS to find out how to proceed and they advised the agent could directly transfer responsibility to me via their website. I advised the agent of this on 29 Sept and asked them to do this for both properties.

Today (7 Oct) I spoke with the agent again, having been fobbed off on many occasions. At last they've told me that they have transferred Property B, but can't transfer Property A as it is in a single claim.

Re Property B - I advised the tenants of this, in order to confirm that everything was above board. The tenants then told me they received a letter from the DPS confirming a deposit had been lodged - dated 29 September. This raised alarm bells as sounds like they haven't lodged the deposit.

Does this then mean they have done the same with Property A? I rang the DPS to try and find out if the deposit has ever been lodged and the current situation. The DPS refuse to give me any information. They also advise that they do not regulate the scheme, and ultimately are not interested in the fact that an agent is potentially behaving fraudulently.

My question therefore (and sorry for the long message!) - is there anything I can do to get my deposit back from the agency, or at very least to find out from DPS the current situation?

If nothing can be done, I would simply be grateful if you could warn other landlords and get them to ask for proof that a deposit is lodged with the relevant scheme, if relying on an agent to do this. I understand the ultimate liability is with the landlord...."

Landlord Insurance - professional rates

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RAYDON said...

Fistly I would threaten the agent on two counts:

1) Late Gas Safety Certificate.
2) Tenant Not Notified That Tenancy Deposit Held.

Both are serious and could attract heavy fines. Check to see if the agent belongs to any professional or regulatory body and threaten to report the agency.

If not the Office of Fair Trading Certainly in respect of the deposit issue.


RAYDON said...

The ultimate liability for the tenancy deposit is in fact the agent if they received / took the money from the tenant. (even if it was on your behalf)

They would be fined not you as the landlord, max fine I think £4,500

Nick Stott said...

As a Letting Agent AND a Landlord, I can sympathise with your situation from both sides.

The Letting Agent is liable for not renewing the gas safety certificates, as this leaves YOU personally liable ultimately.

The Letting Agent should also have notified you of where the deposit is and, even if they didn't at the beginning, upon being asked they should give you all the details. After all, why not? It would save them the job of all the paperwork! If they're not giving you the details, they probably didn't protect it in the first place, and that's a big fine as RAYDON says.

Although your agent can't be responsible for a tenant paying their rent, they should have offered you Rent Guarantee Insurance, professional legal advice from a specialist solicitor, and acting more quickly, keeping a thorough record of all correspondence.

I did have a similar situation, but it was because the Landlord didn't take my advice and then regretted it afterwards. Your agent's job is to ADVISE you, not make decisions on your behalf. USE the agent for their specialist knowledge, but don't rely on them to make decisions on your behalf as, to be frank, it's not fair on the agent.


HOMEsure Property

Vanessa Robinson said...

Speaking as an agent and a landlord my advice for the future would be to look for an agent who is NALS registered (National Approved Letting Scheme)

In order to apply to join the scheme, you have to provide information that prove your competency. Also annually, the agent's bank and accountant have to provide reports. In addition the agent's clients benefit from their client money protection policy

NH Storbeck said...

It is for these, and other reasons that I have always managed our properties myself. We have mixed, residential and commercial properties and the commercials are much easier to manage; the tenants are bound by a full repairing Lease and pay the buildings insurance. They are also responsible for the testing and maintenance of the services. We always exclude the provisions of the Landlord and Tenant Act 1954 in our Leases. So all in all, much less hassle.