• Tenants not paying rent is probably the top complaint. This is pretty fundamental as most landlords have fairly hefty expenses to pay, which are dependent on getting the rent in.

• Tenants trashing the property happens far less often, but is a nightmare when it does. Less dramatic is the problem of tenants simply not looking after the place properly.

• Tenants contacting landlords at anti social hours, for example at midnight when they get home from the pub and find they have lost their keys, can be a problem for landlords who manage their own properties

• Tenants not moving out when asked is very annoying, as the landlord is then forced to go through all the rigmarole of going to court for a possession order.

• Tenants changing the utility suppliers is also one that I hear complaints about

Then there are problems with agents! (Not all agents I hasten to add):

• Agents refusing to give details of the referencing done on tenants

• Agents letting the property to unsuitable tenants

• Agents acting in their own interests rather than in those of the landlord, and worst of all

• Agents going bust and running off with all the landlords rent and the deposit money.

Phew! Who would be a landlord? What would you say are your three worst problems?

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1.   Please introduce yourself.  Say a bit about yourself and your company

I am Sally Asling I own and manage SurreyLets, Surreys first online lettings agency. I worked in the corporate rental market for 16 years before setting up my own business in 2008.

I love the property business and like Residential Lettings mainly because it means you can be constantly and consistently helpful to both parties and I enjoy dealing with both Landlords and Tenants. I enjoy the ongoing relationship that you build with clients over the duration of a tenancy as you get to know them and the property really well.

I left the corporate world as I was a bit disillusioned with the way in which the customer service aspect seemed to be secondary to making quick profit.  As the recession hit, larger companies were employing staff with little or no training and thrusting them onto the front line. “Doing the deal” seemed to take priority over ensuring that the right people were put in the right property and that all the relevant checks were completed. It was no coincidence that more complaints were being generated at head offices as a result of this.

I therefore set SurreyLets up with the intention of offering a really personal and professional service with no call centres and accounting offices, with friendly efficient staff who would put the customer first.

2.  How did you first become involved in property?

I became involved in property totally by accident. I quit my drama studies, I was going on to do a PGCE / drama course in Scotland,  but love got in the way and I chose my (now husband) over perusing a drama / teaching. The decision made I had to get a job and took a lettings negotiator job at Mountfords in Surbiton, Surrey. I loved not being office all day, but going out and meeting people. I was however anxious to learn more and quickly progressed through the ranks of the industry.

3.   What do you think is your greatest achievement so far?

On a personal note my greatest achievement has been having my first novel  printed (Appreciating Angels, published by Lizzi Vandorpe of The Blessings Book) which is on par to giving birth to my son!  In my working world it’s without doubt been setting up my own business and gaining clients trust and approval. I launched SurreySales as an online service earlier this year and I feel both Lettings and Sales going from strength to strength.

4.   Do you or your company have any exciting plans for the future?

For SurreyLets I intend to grow the business through franchise. I have drawn up a franchise and this is due to be launched later this year to expand SurreyLets across Surrey. I have my second novel coming out in December and I am hoping to roll out my drama workshops that accompany my book later this year.

5.   What do you think are the greatest problems facing the private rented sector today?

I think the torrent of legislation is becoming overwhelming. I also feel some of the legislation (like EPCs) are not necessary and are just making letting more expensive for Landlords. I think the new rules on HMOs are going to be impossible to police, and that the applications for planning will in some areas fall under great objection and this will cause problems in university towns.

6.  What do you think are the greatest opportunities?

I strongly feel we are moving more towards European attitudes of longer term rentals and more people are buying property for investment. I think the next decade will see younger first time landlords buying to let, but themselves remaining in rented. Rented accommodation will have to remain at affordable prices.

7.   We have a new government.  What would you like them to do for the private rented sector?

I agree that the lettings and sales industry should be regulated. I am not totally a fan of ARLA who charge excessive fees but give very little back to the member; however the governing bodies should meet with government and provide practical help and support to the industry.

I would like to see HIPS abolished, they are not speeding up sales of property particularly and once out of date leave vendors frustrated.

8.  Do you use social media (blogs, twitter, LinkedIn etc)?  What place do you think it has in the future of the property industry?

I am an avid fan of Twitter, Ecademy, Linkedin etc. It’s not about wasting time on the net, its about connecting with people and making contacts and friendships. I believe that the way in which we do business is changing, people no longer want to deal with the impersonal set up of corporate organisations, but want to deal with people they know, like and trust. By having a stable online presence in which you can make yourself the expert in your industry and others will connect into you are refer people to you.

I have had many Landlord leads from Twitter and Ecademy, and I met my publisher of my book through people I connected with via twitter and people that are in my networks. It’s great to do business within networks and these may be local networks or networks on a global scale.

9.   What is the most important lesson you have learned during your time in property?

Get it in writing, get terms signed, don’t cut corners, be honest whatever the situation and always ensure  you double tag keys!

10.   What advice would you have to someone thinking of entering the property industry today?

Do it if you love people. So it because you are results driven, but more importantly because you have a passion to deliver amazing service. Its an exciting industry to be in, but it also has many pitfalls, the legislation can be a battlefield with serious consequences if you get it wrong. There are people out there that are not operating on the right side of the law, and there are problems that can occur in the most unlikely of situations. A strong knowledge is necessary as well as surrounding yourself with people who have experience.

*****

Thank you Sally, and I hope all your ventures prosper.

This is day 9 of my 31 days of tips on tenancy agreements series. To see the rest of the series click here

Letting agents

Many tenants, perhaps the majority of tenants, are signed up by letting agents, who deal with the drafting of the tenancy agreement and signatures on behalf of the landlord, their client.  Indeed often the landlord is not aware that his property has been let until after the event.

The law of agency is not well known and it is not always realised that dealing with an agent is, legally, the same as dealing with his principal – the landlord.  The agent is, as it were, the spokesperson or an extension of the landlord.  There are a number of things which follow on from this:

• If the agent agrees to something, the landlord is bound by it – he is not entitled to say to the tenant “I am not going to do this because I did not agree to it”.  Its not the tenants’ fault if the agent and landlord’s lines of communication get mixed.

• If a payment is made to the agent, it is the same (legally) as if it was paid to the landlord.  So if the agent ‘does a runner’ taking all the landlords rent with him, the landlord cannot make the tenant pay again.  He should have been more careful who he chose as agent

• However the agent is not entitled to withhold money/rent or paperwork from the landlord.  For example see this blog post where I have written about whether agents have the right to withhold references taken about tenants.

• The relationship between the landlord and agent is what is known as a ‘fiduciary relationship’.  The agent, because he is in a position of trust, has a duty to behave honorably and not take advantage of this.  I discuss this in my blog post here

Agents and tenancy agreements

Many agents sign the tenancy agreement on behalf of their clients.  Strictly speaking it should be the landlord who signs.  However I have never known any one take issue with the fact that the agent has signed (insofar as the validity of the tenancy is concerned).

I would suggest though that agents should, if possible, get their landlords to sign the tenancy, if only so they cannot be accused later of making a mistake.

Anything agreed by the agent in connection with the tenancy – the rent, whether the tenant can keep a pet, whether the tenant can re-decorate in a different colour etc, will be binding on the landlord.  So he needs to make sure that the agent is aware of his wishes and carries them out.

As discussed on Day 6, the agent should not put his own name on the tenancy agreement as landlord.  Not because this might this cause the landlord problems if he has to take over the management of the property (although it might), but for the agents protection.

Agents liability

Generally an agent is not liable personally to a third party where he has been acting as agent.  However if he is acting as agent for an ‘undisclosed principal’ (i.e. if he puts his own name on the tenancy agreement and signs it without telling the tenant he is an agent), then he *will* be liable.  Of course if he gets sued by the tenant he can join the landlord in to the proceedings, but this will not help him if the landlord is insolvent.

It should perhaps be repeated here that although many agents are honorable and competent, and do a superb job for their clients, at present letting agents are unregulated.  So any Tom Dick or Harry can set up, with no qualifications whatsoever.  The government has promised to rectify this, but in the meantime both landlords and tenants should be careful which agents they choose.

Do you have any comments on this section?  Have you experienced problems with an agent signing the tenancy agreement as landlord?  Were you aware that an agent had a fiduciary duty to his principal (landlord)?  Do you agree that agents should be regulated?

Tomorrow I will be talking about describing the property in the tenancy agreement.

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This is day 6 of my 31 days of tips on tenancy agreements series. To see the rest of the series click here

The Parties to the tenancy agreement

These are the landlord and the tenant. And perhaps in some cases, the guarantor (although guarantors are looked at on day 8).

Perhaps the most important thing to say is that when you are writing the names of the parties on your tenancy agreement, you need to get them right.  Make sure that all spellings are correct, and put the full name – Mr Andrew Smith rather than just A Smith.

Tenants

You should ideally include all adults living in the property on the tenancy agreement.  If their name is not on the tenancy agreement then you cannot sue them for rent if they don’t pay, and their status will be that of guest or lodger of the tenant.

People often ask about adult children.  Should they go on?  The answer is that it depends.  if they are about to move on to college or a flat of their own in a few weeks or months, probably not.  However if they are going to be living at the property permanently and contributing to the rent, probably yes.

What about minors (people under 18) wanting to rent a property? Sometimes 16 and 17 year olds will want to rent their own place. The main problem here is that people under 18 are legally incapable of owning an interest in land. The grant of a legal tenancy to a minor will take effect as a contract by the landlord to hold the property in trust for the minor. This is not a really good idea so you should add an adult as a  joint tenant (who can also act as a guarantor).  Once the minor reaches 18, a new tenancy agreement can be signed in his or her sole name.  Note though, that although they cannot be a legal tenant, a minor can be responsible legally for the rent.  So put them on the tenancy agreement but have someone else there as well.

The final tenant type to consider is limited companies.  As discussed on Day 4, if the tenant is a limited company the tenancy will be a ‘common law’ one and not an AST.  You need to be sure though that it really is a company.  You can check them out at the Companies House online services.

The Landlord

Agents name given as landlord – this is sometimes done by agents, but is generally not a good idea.  Certainly not from the agents point of view as under agency law, if they are acting for an undisclosed principal they will have personal liability to the tenant under the tenancy.  Not something, I am sure, that they will want.  There is nothing wrong with having the agents name on the agreement, but it should be as agent and not as landlord.

People sometimes get very concerned where the freehold ownership of land is in joint names and only one of the owners is listed as landlord.  However one of joint owners has the power to rent out the property on behalf of both owners.  So this is not a problem and does not (as some tenants hopefully suggest) mean that the tenancy is illegal and they don’t have to pay any rent!

Also, once the tenancy agreement has been signed a tenant is not entitled to challenge his landlords title.  So even if it were illegal, there would be nothing the tenant could do about it.

This leads on to the rather odd rule that a tenancy granted by a squatter can be perfectly valid – as between the squatter and his tenant that is – while it lasts.  However the owner of the land will be entitled to evict the squatter at any time in the normal way, which will also end the tenancy (and when the bailiff comes he has the power to evict whoever he finds at the property).  Note that anyone having problems with squatters should visit my site www.evictingsquatters.co.uk.

Do you have any comments on this section?  Do you put adult children on the tenancy agreement?  Have you had problems with tenants who are minors?  What is your experience with the matters discussed here?

If you have enjoyed reading this, why not subscribe to The Landlord Law Blog by email? Then all posts will be delivered to your email ‘in box’ and you will not miss any.

Tomorrow we look at matters relating to the landlords’ and tenants’ address.

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Indeed landlords often complain that they find out about prospective tenants only after they have been installed in their property, and have not been given any information about them at all. When they ask for information they either get no response or the agent says it is forbidden under the Data Protection Act.

What is the legal situation here?

People often do not realise that when someone is employed as an agent, this is a specific legal relationship with its own legal rules: the law of agency. In an agency situation there are three parties:

• The principal (ie the landlord)
• The third party (ie the tenant), and
• The agent (ie the letting agent).

Any contract made, will be between the principal/landlord and the third party/tenant. The agent will be the person who negotiates this on behalf of the landlord and who sets it up. However if anything goes wrong, the tenant will (other than in a few specific exceptions, such as tenancy deposits) need to sue the landlord rather than the agent.

The agent is in a responsible position therefore, as he has the power to bind the landlord in a contract, which the landlord knows nothing about. When dealing with an agent, a tenant is entitled to rely on promises made by the agent on the landlords behalf. For example if a landlord says ‘no pets’ to his agent but the agent agrees that the tenant can keep his staffordshire bull terrier in the property, the landlord will be bound by that.

So legally the agent is like an extension of the landlord, and legally, dealing with an authorised agent is the same as dealing with the landlord direct.

Because he is in such a powerful position, agents have what is known as a ‘fiduciary relationship’ with the landlord. I discussed this in my previous blog post here. One of the elements of this is the duty of the agent to account to the principal and also to hand over all documents produced by him for the purpose of the agency relationship.

But where does this leave references obtained by the agent on the tenant? To a certain extent this is governed by the terms and conditions of the agency contract. If the landlord signs an agency agreement which specifically states that he will not have access to any of the tenants referencing, he will probably be bound by this.

However what if, which is probably more common, the contact is silent on this point?

This begs the question of who the reference actually belongs to. I would suggest that it is the property of the landlord, as it was obtained by the agent for the purpose of the landlords property, in his capacity as agent for the landlord. It is also paid for by the landlord, although in many cases the landlord will be refunded by the tenant. However it is the landlord who is ultimately responsible for the cost of referencing. Agents are in the business of making money from their agency work, not being out of pocket by paying personally for referencing tenants.

If the reference is the landlords property therefore, has the agent the right to refuse to let the landlord see it?

Well there is something called an ‘agents lien’. This entitles an agent to hang on to his principals property until he gets paid. However, if he has been paid, then he has no excuse to withhold the property.

What then of the agents normal argument that passing the reference on will be in breach of the Data Protection Act? Well this is quite interesting. If you visit the Information Commissioners Office web-site, you will find on this page, links to various guides to good practice. And in the guide in disclosing information about tenants it says:

Can landlords see references which were provided to the letting agents?
The agent can pass this information to the landlord, as long as, when the reference is asked for, they make clear to the tenant and the referee that this will happen.

The qualification here rather seems to go against what I have always understood to be a principle in the agency / principal relationship, i.e. that the agent is merely an extension or arm of the principal, and is obliged to account to him for everything that he does including all the principal’s property, subject to his lien.

There are two important reasons why the landlord should be entitled to see the references if he wishes, in particular before the tenancy is granted:

1. Landlords can suffer massive losses through bad tenants being allowed into their property, both through unpaid rent and through the tenant actually damaging the fabric of the property itself.

2. They may also want to check that the agent has carried out any referencing at all. Sadly it is not unknown for agents to pocket the reference fees and not actually get the reference. I have also known of several cases where the referencing done was grossly inadequate for the type of property being let (for example in in a case involving a high rent property a year or so ago, where the landlord suffered losses of over £20,000 before we were able to obtain an order for possession and evict the tenant).

If the agent is able to say “sorry, can’t tell you anything about the references we got, Data Protection Act”, how can the landlord be sure that this important part of the agents job has been done properly?

So my view is that, notwithstanding the Data Commissioners guidance (which is simply guidance, not legislation) the landlord is entitled to see the references (subject to the agents lien) as:

• They are his property
• He has a right to know about the tenant who is being installed in his property (in view of his potential losses if the tenant is unsatisfactory), and
• He has a right to check that the agent is carrying out his job properly

However to avoid any problems, I would advise landlords to make it very clear, when they instruct an agent, that they will want to see the references, before the tenant is approved.

And also make it clear that it is the agents responsibility to take such steps as are necessary (ie tell the tenants and the reference agency) in order to prevent their being in breach of Data Protection Act by passing references over to the landlord.

You should also check over very carefully your agents’ terms and conditions before you sign them, and make sure that this is written in before you sign (or if necessary write it in yourself before you sign).

Do you have any comments on this? Landlords, have you experienced any problems getting tenant references out of agents? What do lawyer readers make of my analysis? Agents – what is your normal practice here?