Posts with tag: letting agents

Agents are failing to substantially vet tenants, survey claims

Published On: September 14, 2017 at 8:39 am

Tags: agents,letting agents,UK landlords,would-tenants

A new report has accused letting agents of failing to carry out substantial financial checks on would-be tenants.

Tenant referencing and insurance operator Landlord Secure suggests that only 22% of prospective renters were required to give proof of sufficient funds in accounts linked to their rent. This was based on results of a survey of 1,000 tenants and 1,000 UK landlords.

Evidence

Only 35% were asked to provide evidence that they had an active bank account, with 52% being asked to provide a form of identification.

Landlord Secure claims that just 29% of prospective tenants were asked to confirm that they were in employment during the application process. Just one-quarter were asked to give a reference from a previous landlord in order to give proof of their rental payments.

Agents are failing to substantially vet tenants, survey claims

A spokesman for the firm noted: ‘There is a misconception among landlords who rely on letting agents to carry out checks on tenants that the information they are getting gives an accurate and up-to-date reflection of a new tenant’s financial background.’

‘The reality, however, is that agents rely far too heavily on information that is publicly available, like if an applicant has been subject to a county court judgement or been declared bankrupt. But this will not provide an accurate picture of an applicant’s current financial situation and more robust credit checks need to be made to give landlords the data they need to make informed decisions.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/9/agents-fail-to-conduct-sufficient-financial-checks-on-tenants–claim

Lettings Complaint Surge comes as No Surprise, Says AIIC

Published On: September 11, 2017 at 9:38 am

Author: Em Morley

Categories: Property News

Tags: complaints,inventory,letting agents

A lettings complaint surge, recorded by the Property Redress Scheme (PRS) in 2016, comes as no surprise to the Association of Independent Inventory Clerks (AIIC)…

In August, the PRS published its annual report, which showed a 40% increase in complaints made last year compared to 2015.

Lettings Complaint Surge comes as No Surprise, Says AIIC

The organisation also revealed that either tenants (51%) or landlords (35%) made more than 85% of the complaints that it received.

Property management (29%), deposits (27%) and problems with rent (15%) were the most common complaints received by the redress scheme in 2016.

The AIIC notes that the complicated nature of the lettings process, alongside an increase in legislation, could be responsible for the lettings complaint surge.

According to the PRS, the overall rise in complaints is partly down to its membership growth, but also partly down to a heightened public awareness of the formal complaints procedure – a sentiment echoed by the AIIC.

The Joint Chair of the AIIC, Danny Zane, says: “Here at the AIIC, we were not surprised to see that the vast majority of complaints received by the PRS in 2016 were made either by landlords or tenants.

“Rental relationships can be complicated, and the more transient nature of the letting sector increases the scope for disharmony between tenants, landlords and letting agents.”

He adds: “In recent years, agents, landlords and even tenants have been required to jump through more legislative hoops, and so there is now more potential for things to go wrong and, put simply, more things to complain about.”

Deposit problems were one of the most common complaints made last year, and the AIIC says that, if more letting agents and landlords provided professionally compiled, independent inventories, then the number of complaints relating to deposits could be reduced.

We have created a comprehensive guide to help landlords put together a thorough inventory: /guide-compiling-good-inventory/

Emma Glencross, another Joint Chair of the AIIC, continues: “An impartial and professional inventory comprehensively details the condition and contents of the property at the start and end of the tenancy.

“They help to reduce disputes at the end of a tenancy, as landlords can make fair and legitimate deposit deductions, while showing tenants exactly what they are being charged for.”

Zane concludes: “That’s why we’re of the long-standing viewpoint that independent, professionally compiled inventories should be made compulsory by the Government.

“If all parties provided independently compiled, professional inventories to a uniform standard, then there would be fewer complaints relating to deposits.”

MPs Debate Letting Agent Fee Ban in Parliament

Published On: September 7, 2017 at 8:11 am

Author: Em Morley

Categories: Property News,Tenant Fees Ban

Tags: letting agent fee ban,letting agents,lettings fees

Yesterday, MPs debated the proposed letting agent fee ban in Westminster Hall, Parliament.

MPs Debate Letting Agent Fee Ban in Parliament

The plan was originally confirmed in June’s Queen’s Speech, following an outlined proposal by former chancellor Phillip Hammond in November 2016.

Kevin Hollinrake, the Co-Founder of Hunters Estate Agency and MP for Thirsk and Malton, called the debate amongst MPs.

It is believed that an outright ban on letting agents charging fees to tenants will be implemented at some point over the next year.

The draft Tenants’ Fees Bill – outlined in the Queen’s Speech – also revealed plans to cap security deposits to one month’s rent.

The official consultation to the letting agent fee ban closed on 2^nd June 2017.

Many members of the lettings industry believe that letting agents will pass on higher costs to landlords in order to recoup the fees that they can no longer charge tenants.

Therefore, landlords may either put rents up for tenants – which would only damage tenants’ finances further – or self-manage their properties – which could lead to some landlords failing to carry out all of their legal obligations.

David Cox, the Chief Executive of ARLA Propertymark (the Association of Residential Letting Agents), responds to the debate: “We welcome [yesterday’s] comments from Kevin Hollinrake MP around the unintended consequences of a total ban on letting agent fees, including higher rents for tenants as landlords seek to recoup their costs. This is something ARLA Propertymark has warned against for some time. We commissioned independent economic analysis earlier this year, which showed the average tenant will see their rents increase by £103 on average per year as a consequence of a full ban.

“It’s important that the Government understands the value of the services agents carry out for both landlords and tenants when shaping its final legislation. We are therefore disappointed in the Housing Minister Alok Sharma’s comments [yesterday], declaring that the Government’s position remains that all fees will form part of the ban. As Kevin acknowledges, the ban on fees for referencing checks will cause problems. Agents are required to carry out these checks by law, and they invest both time and resources to ensure this work is carried out properly. The Government must now consider exempting referencing checks from the ban as well.”

What are your thoughts on an outright letting agent fee ban for tenants?

Government Should Enforce Lettings Fee Laws it Already has, Insists RLA

Published On: September 6, 2017 at 8:02 am

Author: Em Morley

Categories: Property News

Tags: letting agent fee ban,letting agents,lettings fees,tenants

Government Should Enforce Lettings Fee Laws it Already has, Insists RLA

The Government must do more to enforce the lettings fee laws it already has, which were designed to improve transparency around letting agent fees, before looking to ban them outright, insists the Residential Landlords Association (RLA).

MPs are debating plans to ban letting agents charging fees to tenants today.

Since May 2015, lettings fee laws have compelled letting agents to publish details of the fees they charge. Agents breaking this law can be fined up to £5,000.

Figures published earlier this year by the National Approved Letting Scheme (NALS) found that, after two years of the lettings fee laws coming into effect, 93% of councils had failed to issue a single financial penalty to a letting agent for breaching the rules. Only three penalty notices had been served across England for failure to display all relevant landlord and tenant fees.

Almost 60% (59%) of councils admitted that they do not consider the displaying of lettings fees to be a high priority for the allocation of resources within Trading Standards, while 45% said they only undertake reactive enforcement activity.

Instead of banning letting agents from charging fees to tenants, the RLA is calling for immediate action to better enforce the lettings fee laws that are currently in place. This includes the Government using powers it has so far failed to use to force agents to display the fees they charge in prominent positions and specify them in much greater detail.

The organisation is also calling for letting agents found guilty of breaking the transparency rules to be fined much more than they are at present. The RLA suggests that fines should be up to £30,000.

David Smith, the Policy Director of the RLA, insists: “Laws without proper enforcement serve only to let tenants and good landlords down.

“Rather than pressing ahead with plans for more legislation in the sector to ban letting agent fees at an unknown time in the future, ministers could achieve greater and earlier impact by using the powers they already have to improve transparency and introduce far tougher penalties for agents found to be breaching the law.”

He adds: “This would send a clear message that enforcing bodies will not tolerate any letting agents flouting the law.”

Could reviewing rent collection process recoup thousands on unpaid rent?

Published On: September 5, 2017 at 2:08 pm

Author: Em Morley

Categories: Landlord News

Tags: landlord,letting agents,rent arrears

Letting agents could be able to claim back thousands in unpaid rent for their landlord clients, simply by reviewing their rent collection procedures.

Automated rental platform PayProp made the statement, suggesting that manual reconciliation and reactive, ad hoc management of arrears could be costing agents and landlords vast sums in unpaid rent every year.

Rent Arrears

Research from the Residential Landlords Association indicates that 28% of landlords have experienced rent arrears during the last year. A separate study earlier this year from Your Move discovered that nearly 9% of tenants in England and Wales were in rent arrears.

PayProp has described the process of reconciling payments manually, still a process carried out by many agents, is: ‘labour intensive and open to human error.’

As a result, the firm is advising agents to review their rent collection procedures and to employ automation in order to remind tenants that their rent is due and if they miss a payment.

Neil Cobbold, Chief Operating Officer of PayProp in the UK, noted: ‘Sending letters to chase unpaid rent is an outdated and largely ineffective process. It’s easy for tenants to ignore letters and it’s also a waste of paper – particularly if this approach garners few results.’[1]

Could reviewing rent collection process recoup thousands on unpaid rent?

SMS Success

In contrast, Mr Cobbold said that SMS reminders are the most efficient and successful method of chasing rent arrears.

Figures released from PayProp indicate that 61% of customers in arrears either settle or arrange payment within 48 hours of being reminded by SMS.

Concluding concludes: ‘When it comes to payments we’re of the viewpoint that many agents’ current method of collection and reconciliation is outdated and inefficient. We passionately believe that an automated rental payments process can save agents money and time, while also helping them to generate more revenue and grow their lettings book.’[1]

[1] http://www.propertyreporter.co.uk/landlords/rent-collection-review-could-return-thousands-in-unpaid-rent.html

Letting Agent Excluded from TPO for Four More Years

Published On: September 5, 2017 at 10:01 am

Author: Em Morley

Categories: Property News

Tags: letting agents,redress scheme,rogue letting agents

Letting Agent Excluded from TPO for Four More Years

The Property Ombudsman (TPO) has extended its exclusion of a letting agent by an additional four years, after seven more landlords raised disputes against the firm.

Premier Property Management (PPM), based in Truro, Cornwall, was originally expelled by the redress scheme in November last year, after it was discovered that the agency had failed to pass on rent payments and delayed handing over deposits to a landlord.

PPM was initially excluded from TPO for a period of two years, but the expulsion has now been extended following additional complaints by landlords, which resulted in awards totalling £20,566.23.

The punishment means that PPM can no longer trade legally, although it appears that the company is no longer trading and the website is no longer active.

The Chairman of TPO’s board, Gerry Fitzjohn, says: “While it is believed that the firm is no longer trading, we have taken action to ensure the firm’s expulsion is extended so they are unable to trade if they attempt to register with any redress scheme.

“We have also alerted the relevant authorities concerning their conduct. We urge consumers to always check their sales or letting agent is registered with TPO and following the scheme’s Codes of Practice, which offer additional safeguards to protect consumers from unfair practices.”

In coming to a judgement on each case, TPO considered the evidence presented by landlords, which included emails and bank statements, and the standards set out in TPO’s Code of Practice.

TPO, Katrine Sporle, also comments: “This agent’s behaviour fell well below the standards expected, and their systematic failure to pass on rental payments and deposits received has affected the lives of several landlords.

“Cases like these are fortunately extremely rare, but do highlight the importance of consumers keeping their own written records, so I can review emails, bank statements and correspondence as part of my investigation to determine if the agent has acted fairly.”

Landlords, remember to always check whether your letting agent is registered as part of an approved redress scheme, such as TPO.