A recent news story about a Letting agent who was asked to pay a £70,000 fine was the topic of conversation today around the local watering station in the office. A local Agent was asking one of our Franchise Owners how they cope with all the worry and stress and the Franchise Owner was eager to talk to me about it.
The issue is that he thought the Agent was lying to him because he mentioned not being part of either a redress scheme or using client money protection. Membership of a redress scheme is a mandatory legal requirement for any letting agent.
I had to gently inform him that this is sadly not uncommon. The question he asked was simply “but why would you risk not complying with legislation in your business?”
Good question. I think most landlords and tenants never think to ask. If you are dealing with an Agent you naturally assume that they are fully compliant with all legislation. Actually seeing as you probably don’t know what that legislation is you TRUST that they are!
When you hand over deposits, where does the money go? Is it safe and will you get it back? Normally you have no idea, again you trust that the agent is doing what they should and not collecting for their upcoming retirement fund to Mexico!
The reason that an agent would not adhere to the rules and regulations is very simple, time! There are always changes to the law regarding tenancies, recently the Section 21, Section 8 and Section 13 notices have all required changing. The time this takes is restrictive to the individual responsible for every aspect of their business. They simply have too many balls to juggle.
Some Agents can’t afford to pay someone to fill this specific role and they certainly don’t have the corporate resources to have a department dedicated to the compliance of their office. So they simply don’t.
It is an interesting journey for our prospective Franchise Owners. We tell them about all the things that they need to adhere to and they usually start to look a little pale. We then introduce them to all the people that we employ specifically to ensure that they are always compliant. We even introduce them to our internal auditors who are employed to double check their compliance every year. They start to relax a little after that.
It is easy to take this support somewhat for granted. However, without it, the task of compliance would be simply monumental!
Please don’t think that I am supporting or condoning non-compliance, I am most certainly not. I am simply offering an explanation as to why it does not always happen. The pressures of running a business are many and varied and without the necessary resources something simply has to give.
My advice therefore to Landlords and tenants alike is to always check. Ask where deposit money is held and ask when the Assured Shorthold Tenancy Agreement was last updated. Ask which Ombudsman service the agent is a member of. Find out if the agent has client money protection. (All Belvoir offices are members of SAFEagent, the signpost to agents with CMP). Do your due diligence before you take a risk with either your property or your money.
There is no point after the event complaining that you didn’t know, in a world that is so incredibly information rich, claiming that you didn’t have the necessary information will probably encounter raised eyebrows.
Look after yourselves and make sure that you get it right by checking that the people you rely on are doing it right!
Belvoir! is an award-winning estate and lettings agency with 160 successful offices around the U.K. If you would like to talk about being our next success story, please call us on 01476 570000 or email us on firstname.lastname@example.org
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