Many landlords use letting agents to find tenants and manage their properties. Most letting agents do a good job and many are outstanding.
But not all.
What about YOUR letting agents? Are they really acting in your best interests?
Here are six things you need to watch out for.
1. Do they and their staff have proper qualifications?
The letting agent industry is unregulated. There is nothing to stop any Tom, Dick or Harry from setting up shop with little experience. Many do.
Good agents will have undergone training, and they and their staff will be properly qualified.
This is something you need to check when looking for a new agency. If your agents have not been trained properly – how can you be sure that they know what they are doing?
2. Are they complying with the relevant regulations?
There are three main requirements at present:
- They must belong to a property redress scheme – either the Property Ombudsman or the Property Redress Scheme
- They must carry client money protection – to protect you if they lose or run off with your money
- They must publish their fees – which should be inclusive of VAT and easily found
You should be able to check that agents are complying with all three requirements by looking at their website and the information displayed in their offices.
3. Are they referencing your tenants properly?
It’s sometimes hard to find this out, as some agents refuse to pass on their referencing information, citing the Data Protection Act.
However, you are entitled to this – the checks have, after all, been done on your behalf and have been paid for by you – either directly or through the commission you pay.
If you are registered with the ICO (which most landlords should be), then there is little reason for them to withhold this on data protection grounds.
If agents are worried about the Data Protection Act, then they should notify referees and credit reference agencies when requesting information that the data will be passed on to the landlord. Then there will be no problem.
The fact that your agents are hiding this information from you could be a sign that they are hiding their failure to reference properly.
4. Are they taking kickbacks from repairmen and other service providers?
This can be a problem for you as it may mean that the services are more expensive than they would otherwise have been.
Taking what is called a ‘secret profit’ is in breach of agency law and will be a reason for you to cancel your agency contract without notice, if you find out about it.
Before making a complaint, though, check your agency’s agreement.
If they have disclosed the fact that they take a fee from tradespeople, it will not then be something you can challenge.
5. Are they encouraging you to agree to a long-term contract with unsuitable tenants?
The reason why (some) agents do this is so they can take their commission for the whole term upfront.
Needless to say, they will not normally be willing to repay this if the tenant turns out to be unsatisfactory, fails to pay rent, and/or leaves early.
Watch out for this and only agree to a long fixed term if you know the tenant is reliable. (Note that if the Renters Reform Bill becomes law, this will no longer be a problem).
6. Are they a criminal agency?
This is comparatively rare – there are a fair number of incompetent agencies, but not that many who are actually criminals or who operate in cahoots with criminals. However, you really, really don’t want them to get their hands on your property!
For example, they could:
- Rent out your property to criminals who will turn it into a cannabis farm or use it for other criminal purposes
- Set up an unauthorised ‘rent to rent’ agreement with one of their criminal associates
- Convert your property to an unauthorised HMO – usually in flagrant breach of planning and other regulations.
All of these could get you into problems with the authorities, even though they were done without your knowledge.
Bad agents are bad news for you, so you need to be really careful about who you use. Take enormous care when choosing a letting agent.
There are plenty of brilliant ones around, so make sure you use them and not one of the inferior or criminal agents!
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