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

The agent is the middle man, facilitating the agreement between the landlord and the tenant, and getting paid for this. He is not personally liable.

Or is he?

In some circumstances, the law has specifically provided that an agent will also incur liability.  The best example of this is under the tenancy deposit regulations.

However what about in other circumstances?

Liability for breach of warranty of agent’s authority

What is not always realised that sometimes agents can be personally liable if they are lead people to believe and act on promises or statements made by them, in circumstances where they did not have any authority to make those promises or statements.  Even if they were acting in good faith and did not realise this.

The case law is rather old.  The leading case is called Collen v Wright and dates from 1857.  It concerns a land agent who arranged a lease without having the proper authority of its owner, who refused to ratify it.  The disappointed lessors were held to be entitled to sue the land agent for costs and damages.

My agency law text book sets out five things which need to be established before a claim can be brought:

1. The agent must be ‘acting as agent’

So if he never said he was acting as an agent and the tenant thought he was the owner, this rule will not be available.  But in that case he will be liable as ‘principal’ anyway so it won’t matter.

2. The agent must lack authority

Either because he never had it in the first place or if it was ‘revoked’ or canceled.  So if an agent puts a property on his website but the landlord then tells him he does not want to let it after all, the agent will, after that time, lack any authority to let that property.

3. The agent must not have warned the third party that there might be a problem

So if the agent says “I think this property will be available to you but I just need to check with the landlord first” he will not be liable if after the tenant has booked a removal van and taken a week off work, it turns out the landlord is withdrawing the property from the market.

4. The third party must have relied on the agents ‘representation’

If the tenant was already booked to move down on that day anyway, then he probably won’t have a claim against the agent if the landlord pulls out.

5. The third party must have suffered damage.

If the tenant was able to find another property as good as or better, which he could move into on the same day, he will have suffered no loss so will have no claim.

Situations with scammers

In my recent post on scammers, I suggested that agents may incur some liability in some cases.

For example if a fraudster contacts an agent about a property, and in good faith he advertises it.  If a tenant then rents the property through the agent, only to find that the scammer was not the owner and that he has no right to be there, does he have a claim against the agent?

What do you think?

There is a big campaign on just now by Shelter (reported by the Observer) to make people aware of the scams and deceits practiced by some landlords.

It should be said first that the vast majority of landlords are honourable and law abiding and provide a good service.  However there is no doubt that the scammers are out there and it is easy for the inexperienced tenant (for example students) to get duped by them.

As always avoidance is better than cure, so here are some guidelines to help you:

Always do a bit of background checking on your landlord

For example ask around.  Are they a member of their local landlords association or accreditation scheme?  Can you speak to any of their former tenants?  Also, find out what  a search against their name on the internet shows.

If you are a student and you found them via your accommodation office service, you should be safe, otherwise, be  wary as scammers often target students.

If you do not know much about them, get a credit check done (or even if you do know a bit about them).  One service offering this is Rentchecks which has a specific service for tenants, or you can do a standard credit check from one of the credit reference companies.  There are quite a few online, or ask your insurers if they can recommend someone.

You can also find out who actually owns the property by doing a check at the Land Registry.

Never agree to wire funds to a money transfer service

This is a classic rip off.  You are asked to wire money to a friend or relative ‘as a sign of good faith’.  The ‘landlord’ will then ask for a receipt, withdraw the money and disappear.  This scam is particularly associated with the transfer service Western Union.

Know your rights

The Observer article mentions costs being taken for undisclosed expenses.  It is highly likely that if these costs are just being ‘deducted’ from money paid for rent, the deductions are invalid and the payment will stand as rent.

For example, if they have not been agreed in advance, then in most cases they cannot be charged.  Landlords cannot just impose charges arbitrarily after the tenancy agreement has been signed.

So far as clauses in the tenancy agreement are concerned, these may be unfair and therefore invalid and unenforceable under the Unfair Terms in Consumer Contracts Regulations.  In which case you can refuse to pay them.

There is also mention of landlords asking for guarantees instead of a deposit and then unreasonable expenses being charged to the guarantors.  However the guarantor will only be liable for legitimate claims.  If the costs are extortionate then the guarantor can dispute them and challenge them, at court if need be (although the landlord may not want to risk going to court if the charges really are extortionate).

The guarantor will need the help of the tenant for this though, which is another reason why you should never sign a guarantee for anyone you do not know really well.

Tenants will find a huge amount of information on my Landlord Law website service (which is not just for landlords) or you can buy my book on tenants rights.

If you do get caught out

Tell Shelter.  They are compiling evidence and will be pleased to hear from you. You will find a form here.

Complain about the landlord to your local trading standards office, or local authority Housing Officer or TRO.  Even if they cannot help you, they may be able to take action against the landlord to prevent this happening to others.  At the very least it is helpful for them to know who the rogue landlords are in their area.

If you vacate the property and find that your deposit has not been protected, visit our Tenancy Deposit Claims site to see how a claim can be made against your landlord.

Note that if you found the scammer landlord via an agency, the agent may be liable for breach of warranty of authority.  Have a word with a solicitor about this if you think it applies.  Some may be prepared to act on a no win no fee basis.

Have you suffered from landlord scams?  Do you have any advice for readers?

See more help for tenants on Landlord Law.

This is where you are asked to wire money to a friend or relative to prove that you can pay the rent, and provide details to prove that you have done this.   The scammer then collects the money and disappears.

Michael Banks, of Scamwarners.com told the BBC

“You think it’s secure, you’re making that payment to your relative, then you send him the details of it so he can check you’re of financial standing.

Unfortunately you don’t see your money again, it’s been collected and it’s not your brother that’s collected it.”

Scammers often post false property details on quite reputable web-sites (who do their best to stop them, but you can’t catch everyone). So be wary, and very suspicious if anyone asks you to wire money to a relative as proof of payment.