Letting Agents - Duty of Care

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    Letting Agents - Duty of Care

    I'm wondering whether I have a case against my lettings agency in respect of the tenant they introduced to me who has turned out to have multiple outstanding CCJs, a prior eviction and is now 7 months in rent arrears. The lettings agency have been disappointing with the service they provided from the start, being difficult to contact, slow to respond, lax with documentation and generally lacking in professionalism. The service I signed up for is their Rent Collection Service which basically includes marketing, finding a suitable tenant and then collecting the rent each month for a percentage of the monthly rental (8%+VAT), payable until the tenant vacates the premises. The main case I have against them is that I was not fully appraised of the results of the credit/referencing checks which were carried out. The only indication I had that there might be a problem was a phone call in which I was informed that the tenant had had a CCJ in the past, but that it was now satisfied and there was "nothing to worry about". The actual report showing the full extent of the CCJs was not provided to me until after I requested it when the rent arrears had started. The report itself "passed" the tenant subject to a suitable guarantor being included. A guarantor was assigned, however the agency did not ensure the guarantor completed all the paperwork correctly, so he was no never included in the Tenancy Agreement and therefore is not obliged to pay the rent arrears. I was not even made aware that a guarantor was required at the time of signing the TA. I have not started an official complaint to the agency because I'm worried about alienating them when I may need they help as part of the on-going eviction process i.e. providing documentation, evidence etc.
    In addition, the contract with the agency has get-out clauses such as:-
    1. When we proceed we will be doing so without any responsibility for the accuracy of those references or the information contained in them,
    unless it is due to our negligence or breach of contract. We will not be warranting the tenant as suitable.
    2. We cannot be held responsible if the tenant fails to pay any sum due under the Occupancy Agreement
    unless it is due to our negligence or breach of contract. You will be responsible for any legal charges and expenses incurred.

    #2
    Start with agent's complaint's procedure. If that doesn't work, letting agent redress scheme.

    (When possible..) evict tenant. After they've gone you'll know how much you want: Until then, how much do you sue for?

    It happens, sorry, To become a letting agent in England you need no training, no qualifications, no criminal record check: Bonkers!
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      First of all evict the tenant.
      It is going to be tough to sue an agent, but they do appear to have been negligent, if only in knowing that a guarantor was required and then not signing one up.
      Because they didn't tell you about the need for a guarantor, they are the only people who could have been negligent in that case.

      If the tenant had ccjs that weren't satisfied, again, they have misled you.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment


        #4
        I started the complaints procedure by writing a letter accusing the agent of negligence and lack of duty of care by not telling me about the outstanding CCJ's on the tenant or the need for a guarantor and then not putting the guarantor on the tenancy agreement. The complaint requests recompense for the rent arrears and legal fees as ordered in the Possession Order.
        They responded denying responsibility and in any case, the money is owed by the tenant - not them. But following a meeting with them yesterday, they have now proposed to start a debt recovery process against the tenant at their own expense starting with a request to the tenant's bank for a "Debt Freezing Order" to be placed on it. When this is done, they said that the tenant would not be able to access the money in the account until the rent arrears debt had been paid and if not paid off within 3 months, then any money in the account can be used to pay off the debt. This offer seems reasonable, but has anyone knowledge about "Debt Freezing Order" on a bank account?

        Comment


          #5
          I've only been involved with freezing orders against a company, but think it's the same process.

          It's an odd thing to propose, because there are other ways to attempt to recover the money (which you haven't tried) and a freezing order is basically a court injunction to lock the tenants bank account so they can't use the funds in it so they can pay a debt instead.

          But that assumes that a) the tenant has a bank account with a reasonable amount of money in it and that b) the court will allow it, because it would prevent the tenant paying other people (for example) or buying food and there's no other debt recovery process happening.

          The orders are quite expensive in legal fees (and the banks can charge to execute them) and only last a short period.

          They're usually used, as far as I know, to stop people either pulling cash out of a company account, hiding it or absconding before a court case.

          I'd be really interested if they succeed.

          What they should be doing is helping you evict the tenant (which should have started 5 month's ago).
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment


            #6
            Originally posted by kennyj52 View Post
            I was not fully appraised of the results of the credit/referencing checks which were carried out. ... The actual report showing the full extent of the CCJs was not provided to me until after I requested it when the rent arrears had started. ... the agency did not ensure the guarantor completed all the paperwork correctly, so he was no never included in the Tenancy Agreement and therefore is not obliged to pay the rent arrears. I was not even made aware that a guarantor was required at the time of signing the TA.
            The most valuable thing you can take away from this situation is to request all paperwork in advance of deciding on letting to an applicant. Had you requested the "actual report", you would have been able to determine the risk. Same goes for the guarantor paperwork and TA.

            It's your right to have all the paperwork at your request. A good agent will give you this without you having to ask.

            Eviction should very much be your priority now. And do make sure that the tenant gets yet another CCJ to keep things up to date.

            Comment


              #7
              Thanks all for the advice and here is an update on my case against the agents. By the way, the tenant moved out voluntarily back in April, 2 days before the bailiffs arrived to enforce the eviction, so technically, I guess, she was "evicted"?

              Following the agents offer in June to pursue a "debt freezing order" on the tenant's bank account on my behalf, a court hearing date was set for 18th November. Subsequently in July, the agent informed me that this could not be pursued because the tenant had closed that particular bank account.

              After consulting another solicitor, they advised that it was unlikely that I would be awarded the full cost of my claim (£13,000 total in rent arrears and legal costs) by the courts (because the agents could not be held responsible for rent arrears accumulating as a result of delays in the justice system) or indeed by the Ombudsman and also that it would be cheaper to pursue a claim through the Small Claims Court - but they only deal with claims below £10,000 anyway. They also advised that an initial course of action would be to try to settle out of court with the agent.

              Accordingly, I wrote to the agent and at a meeting in October (they admitted to having made "mistakes" in relation to my main points of complaint), they have offered to pay all my legal costs to date "in full and final settlement" (about £3,700). They said they would also continue to pursue the CCJ award with the courts on my behalf and at their expense, so the court hearing in November is still on course. This is important as it is the only way I can get the CCJ financial award filed against the tenant onto the register of CCJs - a point, by the way, which my solicitor was not even unaware of.

              So now the question for me is, should I accept the agent's offer or fight on?

              Comment


                #8
                Hi there,
                There have been a few cases recently where the courts have found the agent to be negligent and awarded full costs.
                The famous one is Hale vs Blue Sky Properties 2016 and there is another one that Tessa Shepperton posted in
                her blog.
                Find out which redress scheme the agent signed up to PRS or TPOS abs complain to them. TPO recently awarded £21k+ against a negligent agent- go through their case archives.

                From what you are saying, you have a case.
                Also consult with Anthony Gold solicitors rather than anyone in random.

                I am not legally qualified and have no connection to any of the names mentioned.

                Comment

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