LABOUR this week ramped up the pressure to regulate the rental industry saying it wanted an end to ‘rogue’ lettings agents.
"Where is the £220 of cost in terms of administration if you just send an email, open an envelope, stick it on file?”
You know the ones.
All smiles and helpfulness while you have a property you want to market or are looking for a place to rent and then they go deaf when things go wrong or worse run off with your money.
Bad for the tenant who loses the deposit, but at least has had somewhere to live, a nightmare for the landlord who probably has not received any rent and faces being fined and having to pay back three times the deposit.
“They are not rogues,” storms Alan Ward from the Manchester based Residential Landlords Association, “they are criminals. They steal money and should be treated like thieves. Rogues makes them sound slightly maverick and glamorous and believe me having your rent stolen is not glamorous.”
The UK’s main property watchdog, the Property Ombudsman, has received 5,000 complaints about letting agents so far this year and the figure is heading upward given the competition for rental property and the number of accidental landlords renting out through necessity rather than choice.
In the whole of 2011 the Ombudsman received 7,641 lettings complaints and of those that went to judgment only a tiny number were from Manchester, just 12, down on the 16 from 2010.
Not so good if you were one of the 12, especially as these are the most serious ones that have failed to be resolved through mediation and compromise, but still a small number given the thousands of tenancies across the city.
But the Property Ombudsman can only investigate cases against the 60% of agencies which have signed up to the scheme, and who, logically, are going to be among the more reputable and professional ones.
This leaves a lot of tenants and landlords dealing with agencies who are not regulated by the Ombudsman and who are unlikely to be members of other trade bodies.
The Association of Residential Lettings Agents (Arla), which regulates around 3,500 agents, said that fraud complaints had risen in the last 12 months to their highest-ever level.
“In some cases, client money has been used to pay staff salaries, VAT bills or company bills,” said operations director Ian Potter. “In other cases, you can’t see what it’s been used for.”
Even without the wholescale fraud tenants often feel they are paying over the odds to rent a property.
Labour, who failed to act on a report which advocated closer regulation when in power has launched a review into the private rented sector – download it here.
Shadow housing minister Jack Dromey said: "A million families live in the private rented sector. We want to ensure, particularly in these tough times, that they can be confident their money is safe and that they will get a fair deal. There is no place for unscrupulous agents who rip-off tenants by charging them fees they didn’t know they would face and who exploit landlords and tenants alike by failing to protect the money they hold for them."
Shadow secretary of state for communities and local government, Hilary Benn, said something incredibly similar but has also pointed out that letting agents charge wildly varying fees for managing the deal between tenant and landlord.
Benn says that credit and reference checks vary across the country from £10 to £275 while the charge for renewing a tenancy ranged from £12 to £220.
He said: "Where is the £220 of cost in terms of administration if you just send an email, open an envelope, stick it on file?”
A random and totally uncomprehensive check revealed that an agent in my rural town charges £30 per adult for reference checks, compared to £160 to £200 per person in Manchester. That’s up to seven times as much for exactly the same amount of paperwork. How can that be?
Alan Ward believes lettings agents should be regulated, and failing that, that the existing laws and regulations should be better enforced.
But he also says refusing to use agents who are not a member of a trade body will help bring the industry to heel.
He said: “It constantly amazes me that people willingly enter into a contract to hand over a lot of money each month without really looking at who wrote the contract and going over the small print. Both tenants and landlords have a responsibility, irrespective of the agents.”
So first off check if the agent is a member of ARLA - Association of Residential Letting Agents, NALS – National Approved Lettings Scheme or RICS - Royal Institute of Chartered Surveyors AND the Property Ombudsman Scheme. You can find a list of Manchester members here.
Letting
Ask too if they are part of the Safe Agent Scheme, an initiative brokered by NALS to help protect the often large sums of money collected by agents and which of the legally required tenancy deposit schemes they use.
It’s not going to guarantee you have a trouble free tenancy but it will make complaining a lot easier.
What would be even easier is if agents had to display a list of ALL their charges in the shop window and on their websites alongside all the lovely properties on offer so you know what you are going to have to pay before you even step through the door.
It might even spark up a bit of competition.
