This post concerns a similar case to the Hale v. Blue Sky Property Group case which I reported on in 2016.
I have to apologise to the landlord, Mr Shevlin. He emailed me telling me about it earlier this year, but his information got lost in my inbox – so I am quite a few months late in reporting it (although I see Property Industry Eye did a post on it here).
The case was brought by Mr Saul Shevlin who had used Sequence (UK) Limited to manage his rented property, his former home. This is what he told me:
The usual practice was that I would be recommended a particular tenant, I would then be told that they had ‘passed referencing’ and asked if I would like to proceed. I would then get a copy of the referencing report shortly thereafter.
On 22/03/2014 I was told that they had found a suitable tenant ‘a mature adult working full time as a financial advisor’ and that she was a non-smoker.
On 10/04/2014 I was e-mailed and told the prospective tenant had ‘passed referencing’ and on this basis, I accepted the tenant. On 29/04/2014 the tenancy started but I had not received any copy of the referencing report (TLC report).
The tenant immediately fell behind with rent. From the start of the tenancy, she moved in a number of other people (who were not authorised tenants) and held constant noisy all-night parties. All inhabitants smoked and the house began to resemble a squat.
Neighbours were verbally abused and attacked. Police were called 5 times and there were 2 arrests at the property. Windows were smashed (and not repaired) and graffiti daubed on the walls and furniture. Almost all of the contents of the house were either vandalised or stolen at the end of the tenancy. Rent and (all) utility bills were unpaid and bailiffs made frequent visits to the property. This behaviour continued throughout the tenancy.
I felt that the property was being managed very badly, if at all, during the tenancy. This culminated in me requesting a 21 notice be served on the tenant on 29th January.
The issues continued until the end of the tenancy on 29/04/2015. On this date, the tenant disappeared as the agents had no forwarding address and the tenant was ‘lost’. Further, she had changed the locks and the agents had the only key. They were unable to get the key to me for 10 days after the end of the tenancy so I was unable to access it. The property was (perhaps unsurprisingly) left in a terrible state, had been vandalised, graffiti was on the walls, windows remained broken and many items were missing.
The very poor quality of the tenant aroused my suspicions as to why I had still not received the TLC / referencing report. I made further, (circa 20 requests) for the report but was told I was not allowed to see the report due to the ‘Data Protection Act’. I challenged this statement but the referencing details were consistently withheld by the agents.
On 17/11/2015, I contacted TLC directly in another attempt to get the client referencing. TLC had no issues in e-mailing me the full report. It was on the basis of this report that I made complaints to the agents and ultimately took legal action. I thought the response on their internal complaints procedure was woeful, although they did offer me £350 as a ‘goodwill gesture’.
The issues on the client referencing form were as follows. The prospective tenant declared on the original form ‘I have come out of an estranged relationship I am unsure of the status of my credit rating, as my ex-partner did silly things in both our names’. She went on to state ‘should you require a guarantor please request XXXXX my employer named above’.
None of this information was made available to me, nor was the offer of guarantor accepted. The employer reference report was from the guarantor. I suspect this was a ‘primed’ family member. This form was just a signed declaration from a ‘Hotmail’ type account with no pay slips or P-60’s etc. The address of the company was a maintenance / repair workshop and not a financial company (despite being told that she was a financial advisor). The date of birth she provided was different to that on her driving licence.
The TLC report did flag this issue but, again this was not communicated to me. A credit check should have been resubmitted with a correct date of birth but this was not done. The defendant claimed that the ‘date of birth issue’ had been resolved by them internally but provided no evidence of this. They also stated that providing an incorrect date of birth on a credit check report does not make a difference to the report. The Appeal Judge was particularly scathing about this last defence.
The original trial Saul Shelvin –v- Sequence (UK) Limited (Claim No. B9QZ3K5C) was held at the County Court in Colchester before Deputy District Judge Airey on 24th June 2016. I was a sole litigant in person and the Defendant was represented by a London based barrister (who also bought a witness).
DDJ Airey found in my favour and awarded me my full claim of £8872.14. The interesting aspect to this case is that the Defendant was found to be negligent rather than to be in breach of contract.
Since the original trial, the defendant has tried to appeal on several occasions but has been unsuccessful. The final Appeal was on 2nd January 2018 at Chelmsford County Court and the Judge was in full agreement with the DDJ Airey ruling of 24th June 2016.
As Mr Shevlin says, the Judge did not make any award for breach of contract. The Judgement was on the basis of negligence. The defendants owed Mr Shevlin a duty of care which was breached and as a result of the breach he suffered loss. Here are some extracts from the Judgment:
On the balance of probabilities, I am minded to conclude that on this occasions there was a breach in the duty of care that was owed by the defendant to Mr Shevlin.
The defendant is a team of professionals. They are in the business of acquiring tenants …. Mr Shelvln … was not a professional landlord. Although TLC were commissioned to prove a report and indeed did so … there were a number of “red flags” … that ought to have prompted further investigation … at the very least the defendant ought to have made further enquiries and resubmitted the request to TLC for a further credit check to be carried out.
On the balance of probabilities therefore I am minded to conclude that not only was there a duty of care but that the duty of care has been breached.
The Judge then went on to consider whether the loss was too remote as the damage had been done by the tenant, not the defendants. It was not possible to claim against the tenant as she had ‘done a flit’ and her whereabouts were unknown.
This was a case of economic loss which is generally a more difficult claim to bring. However, the Judge agreed with Mr Shevlin, that had the defendants not failed to carry out further investigations into the tenant after receiving the TLC report, and had they managed the property better, the losses would not have been incurred by him.
Indeed, had Mr Shevlin been aware of the full facts he would never have agreed to let to this tenant in the first place.
The Judge, therefore, held that causation could be established between the defendant’s breach and the claimant’s losses.
Some legal points
As Mr Shevlin says, the Judge made the award on the basis of negligence after finding that the defendants owed a duty of care which had been broken.
I would have thought though that she could have found for him also on the basis of the implied terms in the Supply of Goods and Services Act 1982 s13:
Implied term about care and skill.
In a relevant contract for the supply of a service where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill.
The is also the possibility that the relevant clauses in the contract could have been ‘unfair’ under the unfair terms rules in the Consumer Rights Act 2015, and maybe it could also have been a breach of the agent’s duties under agency law.
Still, the main thing is that Mr Shevlin won his case. Quite rightly in my view.
Thoughts and conclusions
Choice of tenant is THE SINGLE most important thing when renting property.
Particularly bearing in mind that once a tenant has signed the tenancy agreement and been given the keys – it is going to be difficult to remove them from the property if they don’t leave voluntarily.
Court proceedings under section 21 cannot start until a minimum of six months after the start of the tenancy. If the fixed term is longer than six months this will be an even longer period, and the proceedings will generally take some three to four months, if not longer (see the post here for an example).
The main reason why landlords use letting agents is to choose a decent tenant. Which is why it is important that they do this properly. Clearly, the unnamed clerk at the defendant firm who actually selected this tenant had not done his or her job properly and Mr Shevlin had suffered as a result.
Bear in mind that although he did finally get his award of £8872.14 this was not paid to him until January 2018 – nearly three years after the tenant ‘did a flit’ in April 2015.
Court proceedings are very stressful and I admire Mr Shevlin for having the guts to pursue this case. However, it should not have been necessary for him to do this. Hopefully, the publicity around this case will encourage agents to do a proper job, not accept credit reports without following up discrepancies, and if mistakes happen, own up and pay proper compensation to their landlords.
When mandatory licensing and training for letting agents are brought in, as we are told is likely to happen, let us hope that this is made clear to trainees.
This is perhaps also a lesson to letting agents about how important it is to supervise their staff properly.
I daresay many if not most of the people working at Sequence are good people – after all, they managed Mr Shelvin’s property perfectly properly before this case. This could have been an isolated incident – in which case it is rather unfair on the other staff there to be tainted with it.
Although nothing can justify the appalling way Mr Shevlin was treated.