We sold a property to a guy from London and the transaction completed last Friday. He's an investor so I was hopeful of retaining him as a landlord customer, but on this occasion it seems it wasn't to be - another local agent had quoted him 6% with no VAT for managing his property. And I'm not that daft.
I know the agent in question, because another landlord has just taken 3 properties off him and given them to me. He too was paying 6% with no VAT. All 2 of the 3 don't seem to have a gas test done. 1 of the 3 are in tenancy arrears. And there's no signs of any tenancy deposits yet - the agent has apparently told the landlord he's getting some money in later in the week so will be able to pay them over then. That's good news if it happens, but it's bad news for the landlord if he doesn't as it's the landlord who's legally liable to the tenant for the return of this money. Having taken some legal advice, the landlord has realised the mistake he's made and now instructed me "before one of my tenants sues me". He may get away with it, but if one of his tenants is savvy, he already owes them money based on the mistakes made thus far.
Which is all why lettings agents should be regulated! Sajid Javed, the Communities Secretary, said last week that he's (finally) going to do this (https://thenegotiator.co.uk/lettings-agent-to-be-forced-to-join-a-professional-body-sajid-javid/) but we'll have to see if he actually follows through, or comes up with some half-baked regulation whereby the standards required are really low, and no-one actually enforces it anyway. It's bonkers that anyone can be a lettings agent - issuing legal contracts, looking after tens of thousands of pounds of tenancy deposits, processing similar sums of rent - without there being any mandatory checks to make sure they are doing things correctly. It's the lack of regulation that enables estate agents to decide overnight they are lettings agents too, quoting a low fee, taking a load off cash off tenants that they don't separate from their own business funds, then wondering why they can't figure out who owes who what. Added to that they've got to manage the tenancy, do inspections, co-ordinate repairs - all things they've never done before in their life. Not rocket science maybe, but not their skill set either. When this landlord asked them to serve notice on one of his tenants, they said he needed to talk to a solicitor - seems that their knowledge of the Housing Act 1988 doesn't even extend as far as a basic bit of form filling. Not that it matters - he can't serve notice with the gas test and the tenancy deposits not administered correctly.
This is a rant but the underlying message is paying peanuts gets you monkeys. Choosing a regulated lettings agent will cost you more, but at least you're getting someone who's done a bit of basic training. And if it still goes wrong, at least then you have some comeback on them - there's a professional body to which you can complain - there's a guaranteed payout via insurance if the worst happens and the agent runs off with your / your tenant's cash. That's why regulation of the sector is long overdue - it will involve us in more admin probably, but from the customers perspective it should drive out those agents that are going to fundamentally rip you off.
I know the agent in question, because another landlord has just taken 3 properties off him and given them to me. He too was paying 6% with no VAT. All 2 of the 3 don't seem to have a gas test done. 1 of the 3 are in tenancy arrears. And there's no signs of any tenancy deposits yet - the agent has apparently told the landlord he's getting some money in later in the week so will be able to pay them over then. That's good news if it happens, but it's bad news for the landlord if he doesn't as it's the landlord who's legally liable to the tenant for the return of this money. Having taken some legal advice, the landlord has realised the mistake he's made and now instructed me "before one of my tenants sues me". He may get away with it, but if one of his tenants is savvy, he already owes them money based on the mistakes made thus far.
This is a rant but the underlying message is paying peanuts gets you monkeys. Choosing a regulated lettings agent will cost you more, but at least you're getting someone who's done a bit of basic training. And if it still goes wrong, at least then you have some comeback on them - there's a professional body to which you can complain - there's a guaranteed payout via insurance if the worst happens and the agent runs off with your / your tenant's cash. That's why regulation of the sector is long overdue - it will involve us in more admin probably, but from the customers perspective it should drive out those agents that are going to fundamentally rip you off.
