A surge in complaints against letting agents

There has been a rise in formal complaints lodged against agents, a spike of 20% to The Property Ombudsman (TPO).

Formal complaints about Letting agents, 67% were supported by the Ombudsman: landlords made 50% of these complaints.

Despite a steep increase in complaints, monetary compensation made by agents to consumers rose by a mere 1.4%.

The main causes of complaints about sales agents were:

• communication and record-keeping
• complaints handling
• marketing and advertising

disputes over instructions/terms of business/commission/termination.

For letting agents, the main complaints were:

• Credit & referencing.
• Inspection of the let property
• Inventory or checkout
• Tenancy agreement related
• A complaint about the mismanagement of tenants
• Lack of communication from letting agent
• A complaint about estate agent contracts
• Missing Break clause in the tenancy agreements
• Letting agent Client money protection

COVID-19 letting agent and landlord relationship The relationship between landlords & agents, even those that were once friendly, has been tested during the COVID-19 period.

With some tenants failing to pay rent, the landlord and agent relationship can become strained.

An increasing number of landlords have complained that their letting agent has received rents but is failing to pass the rent to them.

This reminds me of a large national retail chain CEO saying he would not pay any rent for at least the next few months. He went on to say it’s simple economics; to pay my staff or the rent, it is essential to retain my staff.

Under COVID-19, letting agents and landlords alike feel the financial squeeze. It would seem some letting agents under economic challenging times, too, are opting to pay their staff rather than the landlord.

Overview of complaints against letting agents

Not long ago, letting agents could operate without membership in a government-approved redress scheme.

Before the government redress scheme, if a complaint against a letting could not be resolved, that was the end of the matter. The tenant and/or the landlord could not take the issue any further save for legal action.

Due to the new legislation, if your letting agent cannot positively resolve your complaint within eight weeks, you will be able to take the complaint further using the dispute resolution service of the redress scheme.

There are many good letting agents with business values based on honesty, integrity, and hard work.

These letting agents are diligent in finding a suitable tenant for the property.

Legislation that came into force on October 1st, 2014 requires all letting agents to be a member of one of two independent government-approved redress schemes.

The Property Ombudsman (TPO) The Property Redress Scheme (PRS) These schemes provide excellent free dispute resolution services; the decision made by an independent redress scheme is binding on all parties.

Due to the new legislation, if your letting agent cannot resolve your complaint within eight weeks, you will be able to take the complaint further using the scheme’s dispute resolution service. The complaints against letting agents typically are:

• General poor service
• Tenancy deposits
• Inefficient or inadequate service
• Hidden tenant fees and lack of transparency
• Inaccurate property descriptions
• Disputes regarding refunds of holding deposits
• Inaccurate accounting
• Failing to pass rent to the landlord
• The letting agent is not a member of a redress scheme

If a letting agent is not a member of a redress scheme, then the letting agent is breaking the law.

The local council can investigate the agent and prosecute, issuing a fixed penalty fine of up to £5000.

Reasons to terminate a contract with a letting agent?

There are three main reasons why a landlord may want to end a contract with a letting agent:

1 – To avoid letting agent fees and save money. An increasing number of landlords are choosing to manage their properties.

2 – The relationship between the landlord and the agent has broken down, or the agent is not performing.

3 – The landlord wants to sell the property.

Landlords will generally have a signed contract with the letting agent. Surprisingly, there are a few landlords who have a verbal agreement with their agent.

It is best to have a written contract; however, an oral contract is binding for both parties in law.

Your agreement with your agent is what you are obliged to abide by. If there is contention between the parties, the court will determine the matter.

Letting Agent official complaint bodies

Most complaints related to letting agents can be reported to one of these official schemes:

Property Ombudsman (TPO) Property Redress Scheme (PRS) Check your letting agent’s registration is valid by clicking the above links:

Letting agent trade Bodies complain to

The main trade bodies for letting agents are:

ARLA (Association of Renting and Letting Agents) NAEA (National Association of Estate Agents) NALS (National Approved Letting Scheme) UKALA (UK Association of Letting Agents)

Verbal complaint to letting agent

Step 1: Speak to your letting agent; you can often solve your problem much quicker by contacting your letting agent first.

You can take someone with you when you speak to your letting agent if you feel it will help you.

Your first step should be to raise the issue with your letting agent directly to see if the issue can be resolved amicably.

Most letting and estate agents have a complaints procedure you can follow.

It is essential, as most complaints you escalate to a higher authority will be ignored if you have not given your agent/landlord the chance to resolve them first.

Step 2: write your letting agent a letter. You can make a written complaint by following your letting agent’s complaints procedure.

Check the letting agent complaints procedure to see how long it will take to get a reply.

Most letting agents have a complaints procedure you can follow.

They must tell you about their complaints procedure if you ask.

Always check your letting agent’s complaints procedure to give your complaint a better chance of being resolved.

If you are a member of the British Landlords Association, you can download a free template letter and a pre-action protocol template should you wish?

The templates will save you time.

Government-approved redress scheme Step 3:

From October 1st, 2014, it is a legal requirement for lettings agents and property managers in England to join a government-approved redress scheme. All letting agents are required by law to join one of the two schemes.

Failing to do so, the letting agent is breaking the law.

Reporting a letting agent to trading standards

Step 4:

You can report a letting agent to trading standards if the agent has not registered with a letting agent redress scheme or their terms & practices appear unfair.

As discussed above, complain to the letting agent first exhaust this avenue before complaining to the Trading Standards.

Trading Standards can consider poor or incompetent service Infringement of your legal rights. Trading standards will not consider your complaint if:

That the issue is being or has been dealt with by a court.

Your complaint is outside the timescales.

How to end my letting agency contract?

Read the letting contract you have with your agent carefully. Look for the clause that deals with the process of terminating the agreement.

Most contracts between landlords and letting agents will have clauses dealing with termination. There should ideally be a formula to deal with the agent fees relating to termination.

If you are going to terminate your agreement with your letting agent, you will need to consider beforehand who will manage the property?

You will need to give reasonable notice and negotiate compensation with your agent.

You will need to obtain the following from your letting agent upon terminating the contract:

• Deposit monies
• Any rent outstanding
• Tenancy application form
• Tenancy agreement
• Deposit protection details
• Gas check certificates
• EPC certificates
• How to rent guide

You will need to transfer the management of the tenancy to yourself or another agent. If the agent is not going to hand over the documents, or you cannot amicably negotiate with the agent, you will have to consider the options below.

Unless there is abysmal performance and/or blatant breaches of contract, the agent can hold the landlord to the agreement.

One of the clauses in the contract lettings agents rely on is the one most landlords wish they had negotiated before signing the contract. This clause will read something like:

“so long as one of the original tenants, introduced by the agent to the landlord, is still in the property, the agent fee will be payable ongoing, including on tenancy renewals “.

Courts are generally unhappy with businesses that tie consumers into an everlasting agreement.

The saving grace, in some cases, maybe the statutory rules and codes of conduct, such as The Unfair Terms in Consumer Contracts Regulations 1999.

If the matter goes to court, the judge will determine if the contract between the parties and the terms therein are fair and reasonable.

If you are not happy with the conduct of your agent. you can consider complaining about them to the organisation.

Letting agent contract – Termination Clause

Most letting agreements between the landlord and letting agent have a termination clause. The clause generally will stipulate a notice period, where anyone of the parties can terminate the contract.

Try to deal with the agent in a friendly and amicable way. See if an agreement can be reached, say a one-off fee, equivalent to an introduction fee. This could be like a three-month management fee equivalent.

These negotiations should be documented in writing, just in case the dispute ends up in court. If a landlord has offered, what is considered reasonable compensation by the court for termination, this will help the landlord in court.

As with all disputes, documentary evidence is crucial to winning a case. Ensure you keep all correspondence, emails, and notes of discussions with the agent.

Letting agents, generally, work hard, and their fees are worth the work they do. With increasing regulations, the management of lettings, the right agent, is worth paying a reasonable fee too.

Landlords need to be aware of clauses in the contracts that refer to excessive fees, or estate agency fees, to be paid in the event the landlord sells the property.

Tenant fees complaint A ban came in on June 1st, 2019, for almost all private tenancies that commenced on or after that date.

From June 1st, 2020, the tenant fee ban applies regardless of when the tenancy commenced.

The ban covers assured shorthold tenancies, some student lettings and lodgers living with a private landlord.

The fee ban prevents charges for things like:

• references
• administration costs
• credit checks and immigration checks
• fees for renewing the tenancy when the fixed term contract ends

The fee ban covers fees charged to tenants and their guarantors.

Letting Agent False advertising if the agent has breached advertising rules, you can lodge a complaint to The Advertising Standards Authority (ASA) – they are the UK’s independent advertising regulator across all media.

Final Viewpoint Letter Once you have received the agent’s final response to your letter of complaint, you remain unhappy if the 8 weeks have passed since you lodged the complaint and the issues remain unresolved.

Then it would help if you considered completing the complaints form for the redress scheme the agent belongs to.

You must attach support documents, like copies of your complaint letters and the agent’s final response letter.

How to choose a good letting agency Terminating an agreement with a letting agent may sometimes involve paying some fees to get out of the agreement.

Choosing the right letting a would avoid you having to terminate your agreement with your letting agent later is very important.

The importance of choosing a good letting agent is crucial. It is essential to consider your letting carefully and follow a vetting process that considers the following things.

Is the agent a part of an independent trade body?

Check to see if the letting agent is registered with one of the redress schemes by using the links provided above.

Does the letting agent have an official website?

The agent website must have a complaints section with important information for landlords & tenants.

Check the website, and read the relevant website pages to see how they deal with complaints.

Check the Google reviews and trust Pilot reviews, which can be useful.

Author: Marc Attwater

Date: 10th of March 2020 (Updated 4/10/2020)

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