Watch out for Letting Agents Running off with your Cash!

publication date: Nov 27, 2009
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
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With business for letting agents booming while income from estate agency has plummeted in the last 12 months, it’s important for both landlords and tenants to be aware that letting agents (unlike estate agents) are not regulated and although there are some great letting agents out there, there is the potential for them to run off with YOUR cash!

There have been a number of stories emerging in the last 12 months of estate agents who have turned to lettings to help cover their bills, then have got into financial difficulties and as such have not:-

1.  Banked tenants' deposits properly, potentially walking off with them!
2. Passed on rental monies to landlords.

The result being that some letting agents, either through bad business or sadly through bad practices are not running their letting agencies in the proper manner and both tenants and landlords are losing out as a result.

For example, Martin and Co has one of its franchised businesses in Chester going into liquidation owing over £200,000 and despite the fact that they are supposed to be “the UK’s number 1 letting agent” they have already had five cases of misusing tenants’ deposits.

Recently according to the Oxford Mail, two letting agents and their homes were raided by the police, following complaints to Trading Standards by tenants and landlords who were missing rental income and not having their deposits refunded.

How do you check your Letting Agent is financially sound?

To try and ensure you don’t get caught out by a rogue letting agent or one in financial difficulties, follow our five steps to check out your letting agent:-

Landlords
1.  Only use agents that are part of NALS as agents have to insure themselves if they go bust.

2.  Always check your rental monies are being paid into your bank account as agreed in your terms of business with the letting agent and the tenancy agreement.

3.  Query why any rental income is taking longer than 10 working days after the tenant has to pay the rental income to the letting agent.

4.   If the letting agent is saying that the tenant isn’t paying their rent, double check this by requesting a joint visit with the letting agent to the tenant.

5.   Visit WebCHeck - Select and Access Company Information and order a copy of the letting agent’s accounts. Costs vary, but they are around £1 or more.

Tenants
1.   Make sure you only use letting agents that are part of NALS as all agents that belong to NALs require insurance cover which protects tenants as well as landlords if the agent goes bust.

2.   Check that your deposit monies have been registered with one of the three tenancy deposit schemes, ask for a reference and confirm with the scheme they have received your deposit.

3.   Confirm after a few months with your landlord that the rental income you have been paying is being passed on, for example if they visit the property or you could write to them.

Some other signs to look out for is staff being sacked and only the owner working in the business, not having your phone calls returned, or the office being closed more than usual.

If at any stage you are concerned about an agent, put your concerns in writing and request a meeting. If your issues remain unresolved, then it’s worth contacting a third party organisation that the letting agent belongs to, for example NALS, ARLA or the Guild of Letting & Management. If your agent doesn’t belong to one of these organisations, then you should check out what insurance they have if they do go bust and whether you will be protected. If you continue to be worried, then it’s worth contacting your local Office of Fair Trading.

If you need help finding a letting agent or have a rental or lettings problem, contact us or tel 0845 838 1763.


  


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