Appearances Can Be Deceptive
This month I want to share an experience that happened to me so that we can all learn some lessons.
One of my properties had been let for twelve years and the tenant vacated. It was a while since I had been to the property or the area, so for the re-letting I selected an agent local to the property, who I believe has been trading for around seven years.
What welcomed me was a bright and inviting office, very pleasant and well-presented staff and a real desire to secure my business. They were also a winner of the Estate Agency of the Year Awards with plenty of boards in the locality.
I placed the property with this agent on a Let Only basis – and imagine that many landlords in my situation would also have been prepared to sign up.
Fortunately it is not a horror story which ensues here but instead a disappointment at the lack of technical knowledge and process that the agency possessed.
I was advised that for a Let Only the agent does not undertake an inventory. It is not the case that they insist one is paid for, and therefore plausibly a landlord could proceed without one. On this basis I question whether there is any protection for the landlord, given that any dispute over the deposit would lead to an adjudicator awarding in favour of the tenant if the landlord could not produce a proper signed inventory.
Further I advised the Agent that I would forward them a copy of the EPC and Legionella Risk Assessment. Worryingly, I was never asked for the EPC at the initial marketing stage, and staff told me they had never heard of Legionella Risk Assessments for rented property. The only document they were keen to procure was the gas safety certificate.
The marketing was initially slow and whilst the agent always advised me of viewings and followed these up with some feedback, I was concerned at the lack of activity. It transpired upon checking that the agent did not use one of the major property portals and only included a single front photograph on the sites it did subscribe to. Admittedly I hadn’t asked which they subscribed to, but simply assumed that all good agents had a wide internet marketing reach. I had also assumed that for a newly completely refurbished terrace house a couple of internal shots could have helped!
After around five weeks, tenants were found and referencing was undertaken. The tenancy which the agency produced was a template version produced in 2011 and therefore included nothing reflecting more recent legislation. Evidently Superstrike or the Deregulation Act amongst others have not prompted them into a redraft.
Prior to move in I forwarded the agent the Inventory and Schedule of Condition that I had prepared and asked that they get the tenants to sign it. I also asked that the tenants sign a copy of the EPC, How to Rent Guide, Gas Safety Certificate and provide certified copy passports to satisfy the right to rent legislation. I was advised that they wouldn’t get the tenants to sign the inventory nor EPC, and I have never received any copy of the How to Rent Guide let alone a signed one.
Without these I may well experience difficulties if I need to evict the tenants, or in the event of a dispute when they leave the property.
I believe I have resolved these failings by asking the tenants to sign a checklist confirming the documents that they were issued with on move in but this would have been entirely avoidable if the agent had been more thorough.
What due diligence do others undertake in selecting a letting agent? Do you research where and how they market the property? Do you understand what they will and will not undertake to meet the various and rapidly changing legislative framework? And if they are managing property for you, are they updating their knowledge so they can continue to provide you with correct advice?
Letting agents, like other professionals, owe clients a duty of care and the customer can expect the professional to undertake their duties with reasonable skill and care. Perhaps it would be advantageous to introduce minimum qualification standards for agents, as well as Continual Professional Development (CPD) requirements every year to ensure their knowledge is up to date.
That said there are some amazing agents operating out there and I have had the pleasure of working with a good number of them over the years.
If you are appointing letting agents for your projects, may I suggest you thoroughly vet them, avoid making the decision simply on fee and try to get a real understanding of their knowledge and skillset? Ask what documents they produce, what the tenant is expected to sign, how they vet tenants and understand their marketing process. My lesson: next time I will ask far more searching questions at the outset rather than assuming they know what I know. If the agent lacks the ability to do the job thoroughly and ensure the tenancy is compliant and the landlord protected, then as landlords we are not making any saving on our time by appointing them.