Here are a few things they may be keeping quiet about

1. They do not have any relevant qualifications.

The letting agent industry is unregulated. There is nothing to stop any Tom, Dick or Harry setting up shop with little experience. Many do.

This is why you should ALWAYS look for an agent which is regulated by ARLA, RICS, NALS or at the very least the Property Ombudsman.

2. They are spending your money

Letting agents hold thousands and thousands of pounds of other people’s money. As there is no regulation for the industry, they can keep this where they like. Sometimes it is just put in the firms general bank account along with their own money (or more likely, overdraft) and spent on their own expenses.

This is why (again) you need to use an agent regulated by ARLA or RICS or one which has signed up to Safe Agent.

3. They have not referenced your tenant properly

Finding a good tenant is one of the main reasons why people go to an agent. However, I have had cases where I have been instructed to evict a tenant for rent arrears and we (ie the landlord and I) find out that the initial referencing was unsatisfactory. Many landlords have also complained about this to me.

The problem is exacerbated by the fact that many agents refuse to provide details of any of the referencing material to the landlord, claiming that they are not allowed to under the Data Protection Act. I wrote about this here.

4. They are getting kickbacks from repairmen used for your property repairs

Not all agents do this of course, but it is not unknown for agents to have cosy relationships with tradesman, with the hapless landlord being charged over the odds.

5. They are encouraging your tenants to leave at the end of the term so they can charge you for finding a new one

I wrote about this here. Again reputable agents wouldn’t dream of doing this, but apparently it does happen.

All of this is totally against the principles of agency law. Under agency law the agent has a ‘duty of good faith’ to deal with his principal (in this case the landlord) fairly and not put his own interests first.

Good agents will do this as a matter of course. Others however, won’t. Which category does YOUR agent come into?

(NB  Do you really need to use an agent?  >>  Click here to find out)

My son is at university and he and four other friends rented a house from a property agent in Durham.

When they left the property they verbally agreed with the new tenants that they would leave some personal belongings in the under stairs cupboard and collect them on the first day of the new term.

In the meantime, the new tenants apparently contacted the landlord’s agent and asked for the cupboard to be cleared and the landlord agent arranged this.

The agent made no attempt to contact my son or his friends and simply disposed of the goods worth over £800 and contained university books and notes as well as a couple of high value items.

Do my son and friends have any claim against the agent for not making a reasonable attempt to contact any of the previous tenants given these items were in a cupboard and could have just been forgotten? The agent is blaming the new tenants saying they simply carried out the instruction to dispose of the stuff.

What an awful story!  (And an awful warning too – never trust students!)  I certainly think that SOMEONE should be liable.

My view is that it is the new tenants.  If they agreed to allow the things to stay there, then they can’t just turn around and dispose of them if they change their mind.

I am not sure that the agent is liable as they were not the ones who agreed that the stuff should stay there.  Although I think their conduct is disgraceful and certainly a complaint should be made, if they belong to any professional organisations.

What does anyone else think?

Update from David:

Thanks for this. Things have moved on a bit in as much as my son has spoken to the new tenants and they have signed a statement to confirm that they did not request the removal of the possessions as first thought.

They asked the agent for some repairs to be carried out and the agent asked if they had any personal belongings in the house and they said no. The agent then simply removed and disposed of my sons possessions in the cupboard without any attempt to contact my son or co-tenants.

We have now asked the Property Ombudsman to look at the case.

However we are not saying that ALL letting agents are like this. Far from it!  There are many, many, excellent agents who do a brilliant job looking after both landlords and tenants.

The trouble is, if you are a landlord looking for someone to look after your property, or if you are a tenant looking for somewhere to live – how to you tell which is which?

So this post is to try to set out some signs by which you can spot the good firms.

How to spot a good letting agent

Are they regulated?

The main organisations are:

• The Association of Residential Letting Agents (ARLA)
• The Royal Institution of Chartered Surveyors (RICS)
• The National Association of Estate Agents (NAEA)
• The National Approved Letting Scheme (NALS)
• The Property Ombudsman (TPOS)

Do they have client money protection?

There is a new scheme called SAFEagent whose members are entitled to display the Safeagent logo (see right).

It is very popular with the reputable agents. You should be suspicious of any agent which is not a member of this scheme, or one of the regulatory bodies mentioned above.

Are their staff knowledgable?

Reputable agents will ensure that their staff are properly trained and generally they will have industry qualifications, such as those provided by ARLA.

How long has the company been trading?

If they have been in the area a long time this is a good sign. Dodgy agents tend to come and go.

Although this is not to say that a start up agency is necessarily bad, all good agencies have to start sometime. But longevity is a good sign.

What are their agency fees?

Be suspicious if they are very cheap. What expenses are they cutting down on? It may be staff training and professional indemnity insurance premiums.

Those are my suggestions. But I would be very interested to know what your suggestions and pointers are.

Setting the scene

Regular readers will know that Tessa and I strongly believe that letting agencies should be licensed and regulated.

Not as a punishment but just because the private rental sector suffers from amateurism, which affects tenants, landlords and decent agents who get tarred with the brush used by the dodgy ones to paint pictures that make Francis Bacon’s nudes look glamorous.

Let me tell you about a case I am working on at the moment that will give you an insight into what is really going on out there. Names have been changed to protect ‘Me’, but the details of the case are hard-core facts.

Let’s call them Scammers Ltd.

Mohammed rents a room

A shop front opens up locally as a letting agent. The usual stuff, desks, photos of properties in the window, nothing to separate them from the thousands of others currently in business.

I get a guy in called Mohammed, who paid Scammers Ltd £1,000 up front to move into 1 room in a vacant 3 bedroom flat. The receipt he is given for his money bears the name of a reputable local estate agent, not Scammers Ltd. For the purposes of this article we shall call them ‘Reputable Agents Ltd’.

A day after he moved in, the front door opens and in walks a different agent with 2 prospective tenants looking to rent the whole flat. When Mohammed makes himself known the agent makes himself scarce.

Mary rents the flat, Mohammed gets locked out

A day later up pops Mary, a tenant with a written agreement for the entire flat, signed by a third letting agent in Brixton. Mary goes back to her agents to remonstrate.

Mohammed senses something is amiss and goes to Scammers Ltd to ask for his money back. They tell him there has been a cock up and that if he moves out they will refund him in full. He wisely says he won’t move out until they give him his money back. The next day he returns from the shops and finds the locks changed.

A refund is promised

So he goes to the office and meets Maria (more on her in a bit) who tells him that they have already paid his money back into his account but it will take 3 days to clear. Meanwhile, not knowing his rights he sleeps in his car, £1,000 lighter and waits for the funds to clear……as if!

I call Reputable Agents Ltd and tell them what Scammers Ltd are up to. They are furious and send someone down to my office to get a copy of the receipt bearing their name.

Ben does some research

I track down the website of agent number 2 and see the site is down for construction purposes but with a contact phone number. I call it and it turns out to be a hotel in Blackheath who haven’t a clue what I am talking about.

I do a company search of Scammers Ltd and find it to be a defunct company owned by a local guy who remembers employing Maria some years ago but has long ceased trading.

I also start making a few calls to some ‘contacts’ in the business for a heads up. The information I get back is that Maria is well known to people of certain leanings and that she is actually Marguerite Proudfoot, who previously ran a dodgy agency in South East London and was deported to Jamaica a couple of years back and subsequently came back into the UK under her sister’s name Paula Donaldson where she met up with a Peter Sessin and started Scammers Ltd.

Further info tells me that she made a deal with the owner of the take away next door to her office and signed up a new business owner for £5,000, none of which made it to the landlord, who subsequently put a contract out on Marguerite/Paula’s life, which is why I am finding it difficult to track her down.

Trading standards tell of other similar cases

Next stop for me is a call to the council’s trading standards team, who tell me that coincidentally they have just taken a statement from a woman called Imelda who paid £2,500 up front to move into property at 35 Benishaw Rd. When she turned up she couldn’t get in and returned to the office to be told the same as Mohammed, that her money had been returned but would take a few days to clear.

They also tell me that a bunch of students looking to rent a house together also stumped up £2,500 for 35 Benishaw Rd, rather foolishly without viewing it. Needless to say they didn’t get reimbursed either.

Imelda’s story

So I go and interview Imelda and she tells me that whilst waiting in the office of Scammers Ltd she got talking to woman bouncing a baby on her knee who had also paid £2,500 for 35 Benishaw, with the same result. The problem is, the father of the baby she was comforting was none other than Peter Sessin, the boss of Scammers Ltd.

But Imelda tells me more. She went to the property to view it and met a middle aged Asian couple who said they were the landlords. I was discussing this with a colleague who recognised the address and told me that he has been involved in a harassment case there since early this year and the actual owners are a West Indian couple he has met before, not an Asian couple.

Scammers Ltd plan new offices

Back to my contacts who tell me that Scammers Ltd have another office under a different name in Croydon and are about to open a third office somewhere in East London. I really want to stop this happening.

Mohammed has taken a letter from the place he was renting and it gives me information on an office supply company who Maria went to for furniture. I give them a call and they tell me that she bought £1,000 worth of desks and filing cabinets and paid with a bounced cheque for a company that was dissolved 2 years ago. They are furious and out for blood too.

Trading standards do a raid

Trading standards have enough to go on and do a raid with the police. They find an office behind the shop front with a 2 way mirror so that Maria can presumably scrutinise complainants as they come in. A search of the filing cabinets shows pretty much empty drawers, apart from a business lease contract between her and the landlords for the office. Her given address turns out to be fictitious.

This is just where I am at right now with this. I have visited the Croydon office but nobody is ever there. I don’t know where the intended East London office is going to be or what name it will open under. The 2 way mirror prevents me from making contact and Maria and Peter use a variety of alias’s that make decisive action impossible at present

Scammers Ltd are not the only ones  …

Now this may seem rather scandalous and unusual until you understand that I currently have around 6 or 7 other local agents under my microscope at the moment, all of whom involve addresses that don’t add up, missing deposits and lettings of properties that the agent doesn’t actually have the right to let.

I work in one local authority out of 300+ and yet still the government doesn’t see the need for regulation.

Ben Reeve Lewis

Do you know of any similar cases?  Have you any suggestions as to how this problem can be dealt with.  Leave a comment in the box below.

*****

Ben has started Home Saving Expert, to share his secrets to defending people’s homes from mortgage repossession Visit his blog and get some help and advice on mortgage difficulties and catch up with him on Twitter and check out his free report “An Encouraging note on Dealing with your Mortgage Lender” and have it sent right to your inbox.

Picture by Images of Money

Hi, I’m wondering if you can help.

We signed a 12 month contract on Oct 22nd 2010 with our landlord and due to change of plans – handed our notice in on June 22nd 2011 advising we would be moving out 2 months before the end of our contract – on Aug 22nd 2011.

The estate agent/landlord accepted our end of tennancy, however advised that we may be liable to pay rent up to Oct 22nd 2011 – if they didn’t manage to find new tennants. The estate agency did state that this was highly unlikey due to the current market in London.

Following us handing our notice in on June 22nd 2011, the estate agency quickly added the flat to website and showed 2-3 parties the flat. However, after the first week this then went very quiet and I discovered yesterday that the flat hasn’t been shown to anyone in over 2 1/2 weeks which was hugely frustrating. When contacting the estate agent they said that dispite them not showing the flat to anyone, we would still be entitled to pay the rent past the 22nd August. It is my belief that they are not bothered about letting the flat as they think we will pick up the tab, which is hugely frustrating and also concerning as we can’t afford this.

Can you give me a steer as to what our options are on this matter?

I am afraid you are in rather a difficult position.  The landlord (and therefore also his agent) is under no obligation to find a replacement tenant if the contractual tenant moves out early.  You are the contractual tenants and are legally liable for the rent.

Its probably a bit late for you now, but the best thing to do in this situation is to find new tenants yourself before you vacate, and make sure that they are acceptable by paying for the referencing etc.

It is not as if the agents have made not attempt to relet the property at all.    But their responsibility is to look after the interests of the landlord, their client, not you.  Sorry!