Residential lettings and property management becoming increasingly big business

With the uncertain economy and paucity of available mortgage funding for first time buyers, letting of residential property is booming, and this means significantly increased business for letting agents and property management agents.

In a recent report from Professor Micheal Ball, tasked to investigate and report on the possible issues and options for regulating letting agents, he dealt with the growth of the letting agency market and the issue of whether it should be regulated in the same way as estate agency. In fact, many would say that regulation should be stronger than for estate agency as letting agents handle a significant amount of client and tenant money, and it is perhaps an anachronism that lettings is not regulated in England but is in Scotland & Wales.

Market size

According to the report, letting agents fees are now estimated to be in the region of £1 billion a year, a rapid rise from an OIFT estimate of the market size in 2007 of £145 million. Agents are also estimated to deal with 500,000 members of the public each year, which clearly demonstrates this is a sizeable and important market with public policy consideration. Letting agents/property management agents of residential properties are estimated to deal with £14 billion of client money a year.

Regulation based on complaints needed ?

At present letting agent complaints generally go to The Property Ombudsman but there is no compulsory requirement for letting agents to be members of the Ombudsman Scheme. Some 60% are members, so the available data only relates to that proportion.

The figures given in the report are :-

  • There were  just over 7,600 complaints in 2011
  • The average compensation awarded was £300.00
  • 55% of complaints were made by landlords, 45% by tenants

On the face of it the numbers are not huge but this could be due to the fcat serious issues are taken elsewhere or landlords and tenants are unaware of their legal rights or even unaware of wrongdoing or conflicts of interest.

The major areas of complaint were found to be :-

  • Difficulty in contacting the letting agent
  • Delays in repairs being undertaken
  • Poor money protection
  • Additional unexpected charges

Checklist of tasks a good letting and management agent should commit to

  • Arrange convenient helpful viewings
  • Help choose tenant, take up references, consider and advise on rent guarantees and insurance
  • Arrange pre-letting visit to property & advise on repairs, etc.
  • Explain legal rights & responsibilities to both landlord & tenant
  • Complete suitable tenancy agreement
  • Arrange condition & contents schedules and agree with both landlord & tenant
  • Respond to calls & requests promptly
  • Provide details of utilities & local authority
  • Collect rent, regularly pay to landlord, provide statements to tenants and keep records of any outgoings
  • Explain separate client accounts & client money protection
  • Have professional indemnity insurance
  • Arrange safety checks and provide safety certificates to tenants
  • Periodically visit & inspect property
  • Arrange for routine maintenance and arrange any repairs promptly
  • Record any rent or other arrears and report to Landlord promptly and seek to find out reason from tenant
  • Serve notices in good
  • Check condition at tenancy end and seek to agree with Landlord & Tenant
  • Return deposit less any costs
  • Arrange repairs at tenancy end
  • Collect keys & sign-off property

 

For additional help and advice on any residential property legal issues, we would be happy to help at Darlingtons Solicitors. You can also visit our specialist lease advice website.