Posts with tag: letting agents

Warning after agents expelled from TPO

Published On: May 4, 2016 at 12:00 pm

Tags: landlords,letting agents,tenants,The Property Ombudsman

A warning has been issued by Britain’s largest property redress scheme regarding the actions of two letting agents.

Both agencies, ‘The Flat Agency & Michael Browns Ltd,’ and ‘Property Vibe,’ based in Southampton, were expelled from The Property Ombudsman for a minimum period of three years.

Complaints

The decision to remove The Flat Agency & Michael Browns Ltd’ came following complaints from local landlords and tenants. Cases brought against the agent were all similar and revolved around a delay or failure to pay monies owed. Several raised serious concerns with the Ombudsman, which moved to brandish the agents’ practices are both, ‘deceitful and dishonest.’

Having failed to pay the money owed or any compensation, the agents’ misdemeanours were referred to the scheme’s Disciplinary and Standard’s Committee (DSC). The DSC then moved to expel the agent from membership and registration of the Ombudsman.

Without registration, the two companies cannot legally trade as agents, with other redress schemes also wary of letting previously expelled agents to join. Landlords who lease their property with a letting agent that is not registered with The Property Ombudsman cannot have their dispute reviewed by the scheme.

Warning after agents expelled from TPO

Lack of regard

Gerry Fitzjohn, Chairman of the TPO Board, noted, ‘cases like these are extremely rare but this agent has demonstrated a complete lack of regard for its clients and failed to forward money to them which it should have been keeping in a separate clients’ money account. The firm committed several flagrant breaches of the TPO Codes of Practice for Residential Letting Agents and has been expelled as a result.’[1]

‘Both agents have failed to comply with the TPO Code of Practice by not providing any evidence to support their side of the story or demonstrate an appropriate complaints handling procedure. Their reckless management has caused avoidable aggravation, distress and inconvenience,’ Fitzjohn added.[1]

Mr Clive Robinson, Trading Standards Team Leader at Southampton City Council, noted, ‘Trading Standards can confirm that we have received information both from the Ombudsman and a number of landlords and tenants. Membership of an approved ombudsman scheme is a legal requirement for all letting agents as is the proper protection of tenant’s deposits and we will be working with the Ombudsman and others to address any identified breach of the law.’[1]

[1] http://www.propertyreporter.co.uk/landlords/property-ombudsman-expells-two-letting-agents.html

Worries in the Private Rental Sector as Supply Drops Sharply

Published On: April 28, 2016 at 9:40 am

Author: Em Morley

Categories: Property News

Tags: buy-to-let landlords,letting agents,private rental sector,rent prices,rental supply

The supply of rental housing stock on letting agents’ books has dropped sharply, causing worry in the private rental sector, according to the latest report from the Association of Residential Letting Agents (ARLA).

The March Private Rental Sector report found that the supply of rental accommodation fell to the lowest level since the start of last year in March.

Demand was also down last month, with ARLA agents reporting an average of 33 prospective tenants registered per branch, down by 11% from the 37 seen in February. This is also down on last year, from an average of 33.

Worries in the Private Rental Sector as Supply Drops Sharply

Supply has also dropped on an annual basis. In March 2015, the average number of properties managed per letting agent branch was 192. This year’s figure of 169 properties marks a decrease of 12% and is the lowest level seen since records began in January 2015.

However, the private rental sector appears to be healthy in Scotland, where agents had an average of 273 properties on their books. In Yorkshire and the Humber, agents have 207 properties to manage. Contrastingly, there are just 122 rental properties available per letting agent branch in London.

Due to the 1^st April’s introduction of a 3% Stamp Duty surcharge for buy-to-let landlords and second homebuyers, two-thirds (65%) of ARLA agents predict that current and prospective investors will leave the market, causing a decline in the supply of rental properties. Indeed, many have questioned whether buy-to-let is still a lucrative investment opportunity.

In March, rent prices rose for a third (32%) of tenants, and three in five (61%) ARLA members fear that they will increase further as a result of the changes. It has long been considered that buy-to-let tax changes will push rents up for tenants.

The Managing Director of ARLA, David Cox, comments: “We don’t expect falling supply to stop here – the recent Stamp Duty changes are very likely to cause supply to decrease even further, as landlords withdraw from the market.

“Not only do our agents predict that rent costs will increase further, but rental homes may also face a decline in quality over time, as landlords struggle to keep up with maintenance costs alongside the higher Stamp Duty charge.

“While landlords adjust to the increase in costs, we can expect to see one of three outcomes prevailing in the buy-to-let market: landlords absorbing the cost and taking the hit; landlords withdrawing from the market causing supply to fall; or landlords regaining those costs through hiking rents. Next month we can start to assess the damage.”

Letting Agent Jailed for Stealing £27,000 of Tenant Deposits

Published On: April 26, 2016 at 10:29 am

Author: Em Morley

Categories: Finance News

Tags: fraud,letting agents,rogue letting agent,tenant deposits

A letting agent that was forced to close his firm in New Malden has left 17 landlords out of pocket by stealing £27,000 of tenant deposits.

Chandra Patel, 34, has been jailed for ten months. He was the director of Giraffe Residential, which was closed down in December 2014.

Letting Agent Jailed for Stealing £27,000 of Tenant Deposits

It is believed that Patel used tenants’ deposits to cover his own debts.

Patel pleaded guilty to two counts of fraudulent trading on 23^rd March at Kingston Crown Court.

He has now been sentenced to ten months in prison and is banned from being a company director for seven years. He will also have to pay a victim surcharge, but this figure will be determined at a later date.

Sentencing Patel, Judge Timothy Lamb said: “He traded well until 2014, when things took a turn for the worse. The defendant decided to help himself to the monies, which he held in trust.

“I take into account the defendant’s family circumstances, I take into account that he is of previous good character. However, the defendant became part of a system of retail letting which was created in order to instil trust and confidence. He was plainly not fit to play a part in the system. He abused his position.”¹

Patel has a wife and is a father of three, with his youngest child just five months old.

It is reported that landlords were left to reimburse their tenants from their own pockets after the money was taken, having only been told in a letter in December 2015 that Giraffe Residential would be dissolved and that no payments could be made.

The police and Trading Standards then launched an investigation into the firm, after receiving numerous complaints.

If you need help finding a reputable letting agent, follow this advice: https://www.justlandlords.co.uk/news/choosing-right-letting-agent-property/

¹http://www.thisislocallondon.co.uk/news/14449908.New_Malden_letting_agent_jailed_for_ten_months_after_using___27_000_of_landlords__money_to_cover_debts/

Client Money Protection May be Made Mandatory for Letting Agents

Published On: April 21, 2016 at 8:38 am

Author: Em Morley

Categories: Finance News

Tags: Client Money Protection,Housing and Planning Bill,letting agents,tenants

Client Money Protection (CMP) at last made it into the Housing and Planning Bill yesterday, after an amendment from Baroness Hayter and Lord Palmer was approved.

The amendment would ban letting agents from taking money from tenants and landlords unless they hold separate client money accounts. It was added to the bill during

Client Money Protection May be Made Mandatory for Letting Agents

the report stage in the House of Lords.

Although the amendment does not make CMP mandatory, it allows the Government to review the need for a compulsory measure.

It is believed that the Housing Minister, Brandon Lewis, ruled out enforcing CMP, however, Baroness Hayter said that “constructive” discussions with ministers had led to a change of course.

She said the amendment will “require every letting agent to have money they hold belonging either to the tenant by way of advance rent or to a landlord as rent received to be protected, so that even if the letting agent disappeared or went bankrupt, such money would be safe and available to the landlord.

“Such money is not the agent’s money and, as with clients’ money handled by solicitors and others, should be held separately in a protected client account.”

Just last week, Lewis seemed to rule out introducing CMP during a speech at the Association of Residential Letting Agents (ARLA) conference, when he said he did not want to create too much regulation for the sector.

The Managing Director of ARLA, David Cox, responds to the amendment: “This is positive news for consumers and a great example of the industry and policy makers working together to champion consumer interests. At present, property agents are not legally required to join CMP schemes, which leaves tenants and landlords at risk of losing money.

“This new measure means that when Government reviews its property transparency measures later this year, there is a real chance that CMP could finally become mandatory for all property agents in the UK. Consumers may finally have a guarantee that their money is safe and we will continue to work alongside the Department for Communities and Local Government to make this a reality.”

The DPS and Tenant Shop Partnership Will Help Letting Agents and Tenants

Published On: April 11, 2016 at 12:31 pm

Author: Em Morley

Categories: Landlord News

Tags: letting agents,Tenancy deposit protection,tenants

The Deposit Protection Service (DPS) has announced a partnership with Tenant Shop to help make life easier for letting agents and save tenants money.

The DPS and Tenant Shop Partnership Will Help Letting Agents and Tenants

Tenant Shop provides agents with a notification and management software platform that aims to reduce their workload and paperwork substantially.

The system is also designed to make moving home simpler for tenants by finding them the best deals on insurance, TV and broadband, and energy, by switching them to their chosen package.

Tenant Shop also notifies local councils and utility suppliers of new and vacating tenants, preventing abandoned bills.

The DPS, the UK’s largest tenancy deposit protection scheme, is committed to keeping deposits safe over the course of a tenancy and ensuring the money goes back to the worthy party at the end.

The DPS’s Managing Director, Julian Foster, says: “We’re delighted to be working with Tenant Shop to explore ways in which we can make life for landlords and letting agents easier – as well as saving tenants money.

“Alongside protecting deposits, the DPS is keen to work with other key providers across the industry to raise standards and improve the experiences of our users.”

Glenn Seddington, the Managing Director of Tenant Shop, adds: “We are thrilled at the prospect of working with the DPS, with whom we share a common goal of providing letting agents with the tools to make their lives easier.

“By working together with the DPS, we can reach a wider audience and promote a service that is designed to improve the efficiency of our letting agent partners and which also enhances the industry image by ensuring that tenants are able to secure the most suitable, cost-effective energy, media and insurance products.”

We will continue to provide landlords, letting agents and tenants with updates on any changes to the private rental sector and property industry.

Letting Agent License Costs to Change Under Rent Smart Wales

Published On: March 23, 2016 at 9:35 am

Author: Em Morley

Categories: Landlord News

Tags: letting agents,licenses,Rent Smart Wales,Wales

New license fees for letting and management agents in Wales have been revealed after many smaller agents and landlords urged for the costs to come down.

In Wales, all letting or management agents must be licensed by law under the Rent Smart Wales scheme.

Landlords must be registered and also licensed in most cases.

Backed by several membership bodies, the protestors campaigned against the huge £3,728 license fee, which was the same for small agents as for larger companies.

Under the new fee structure, license costs will now be based on the number of properties managed by each agent.

Smaller agents will now pay less – but still much more than in England under local authority licensing schemes – while larger agents will pay considerably more.

Letting Agent License Costs to Change Under Rent Smart Wales

Costs will range from £1,890 to £6,600 for a five-year license.

The fee will also vary depending on whether the agent is a member of a recognised professional body, such as the Association of Residential Letting Agents (ARLA), the National Approved Letting Scheme (NALS) or the UK Association of Letting Agents (UKALA). Costs will also differ depending on whether the license application was made online or on paper.

Under the Rent Smart Wales scheme, landlords and agents who let and manage properties must obtain a license by making a declaration that they are a fit and proper person and by passing approved training.

Cardiff Council operates the scheme, which was implemented on 23rd November 2015. The new fee structure will be enforced from late next month.

The Cabinet Member for Environment at Cardiff Council, Councillor Bob Derbyshire, comments: “Since the launch of Rent Smart Wales in November, the broad consensus in relation to the cost of agent licenses has been that change is necessary.

“The city council has taken on the feedback and reviewed the fees to reflect comments received. The consensus was that the fee structure should reflect the size of the business.”

He continues: “Rent Smart Wales aims to professionalise the private rented sector by promoting the need for compliance with the law and providing good, safe housing for tenants.

“The costs of delivering the scheme have to be met, but this is a unique scheme in the UK and there will therefore be areas where we will be able to learn from experience.

“We are particularly grateful to the professional agent bodies who have contributed their views during this review process.”¹

Landlords and agents are currently in a grace period. They have until 23^rd November to comply with their new legal obligation. However, they are warned to plan early, as it will take time for license applications to be processed.

Isobel Thomson, of NALS, says: “We are delighted that Rent Smart Wales has recognised that agents who are part of regulatory organisations, such as NALS, are more likely to already have embraced the requirements of the licensing scheme and less likely to generate complaints or breaches of their license.

“We also believe that the new pricing structure, which takes into account the size of a firm’s portfolio, is a fairer method of calculating the registration fee rather than a one size fits all fee.”¹

Landlords in Wales are also reminded that on Monday, Universal Credit rolled out to many parts of the country. You must be aware of any changes to your housing benefit tenants’ finances.

¹http://www.propertyindustryeye.com/cost-of-compulsory-licensing-for-welsh-agents-to-change-after-protests/