The whole point of taking on a letting agent to manage the rental of your property is that you expect them to take the hassle out of being a full-time landlord. You might be in a full time job and not have the time to deal with all the ins and outs of an everyday tenancy, or finding a new tenant when the current one moves on.
But there can be problems when the letting agency doesn’t do their job properly. Many things can go wrong – for example you might reasonably expect that a letting agent will have the right information and expertise to know who is a good risk, and to carry out all of the correct checks on a prospective tenant.
You wouldn’t expect you to forget to complete paperwork (for example, if you had asked for a guarantor for a self-employed tenant or a young tenant)
The Law as it Applies to Letting Agencies
Legally, the letting agent is bound by the same laws as any business who agrees to undertake a job for you – they must carry out any work for you with reasonable skill and care. If they don’t, you are entitled to claim reasonable compensation. In the case of not getting a guarantor for a tenant, if that tenant then defaulted on their rent you would be legally entitled to claim any loss of income that was directly caused through the letting agent’s lack of attention to detail. So, effectively you would e entitled to the months of lost rent, plus any associated legal fees for eviction or legal action you’ve had to take.
Letting Agents and Trade Associations
If you’ve chosen wisely, your letting agent will hopefully be part of a trade association for landlords and letting agents, so hopefully you can use their services to try and resolve any situations that might occur before court action needs to be threatened.
If there’s been more than just a lapse in paperwork, or a letting agent has breached an industry code of conduct, you may be able to take action against them through grievance procedures set out by their trade association. In cases that involve misuse of a deposit, you can contact the relevant tenancy deposit scheme and ask them to get involved. It’s actually illegal, for example, to use a tenant’s initial deposit to cover rent arrears, and they are legally bound to protect any deposit. Any reputable letting agent will be able to tell you who their deposits are held by.
It’s also worth contacting the Estate Agents Ombudsman Scheme if the letting agent is a member of the scheme, and getting advice from them about how to proceed. If the letting agent is a member of the ombudsman scheme, again they will have signed up to a code of conduct.
What to Do When the Relationship Breaks Down
If the letting agent has been negligent in such a way that they are in breach of their contract, you are legally entitled to cancel the contract with them, and should not incur any charges for doing so. This doesn’t affect your right to pursue them through the courts if necessary for any damages (financially) that were incurred through their breach of contract.
Unfair Renewal Fees – a Court Decision
The National Landlords Association has recently been in the press supporting a decision that branded extra fees from letting agents as unfair. The Office of Fair Trading pursued the case which involved the practice of charging landlords a renewal fee if a tenant renewed their tenancy automatically – even if the agent had been underperforming and was technically in breach of their contract. In effect this was charging the landlord when the letting agent had done nothing.
The judgement that the OFT obtained in early 2010 made it clear that landlords “should not be presented with a surprise bill for services they have not consciously agreed to.”
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