Setting up a "Letting Agency"/Property Management company

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    Setting up a "Letting Agency"/Property Management company

    Hey guys,

    Just picking your brains if you don't mind.

    We have a large family owned residential property portfolio and the management of these properties is basically being done on a very informal and ad-hoc basis by 2 family members. It's come to a point where we really need to make things more formal to handle our property interests and we've decided to set up an office with 1-2 new employees solely for the property management work for our portfolio to help with the running of the portfolio - basically like a setting up a letting agency but we won't be taking on external clients. So this new "letting agency" we set up will fully manage all of the properties in our portfolio and hopefully allow the landlords/family members to take a backseat.

    What do we need to be thinking about in terms of the legal aspect of setting this up. ie

    1) Can (our) letting agent company sign the lease (and AT5 in Scotland) on behalf of the landlord?

    2) Who becomes liable for the safe upkeep of the flat - does the buck stop with the letting agency or is it still with the landlord? ie annual Gas safety checks - does the landlord still have a responsibility to ensure this is done annually or will the buck stop with this letting agency?

    3) Is there any type of insurances this new "letting agency" will need? Apart from the normal business insurance for the office.

    Basically; bit of a newbie when it comes to just what/and whatnot a letting agency can do in behalf of their clients and legally how much responsibility a landlord still has even when property is being "fully managed" by a letting agency.

    Thanks

    #2
    Sorry to be a pain but you won't get many answers, because it would take up so many pages. Your local Business Link office will give you free advice on how to set up the business, but the knowledge you will need to run a lettings agency is colossal and takes a very long time to accrue. Try reading a few books first by looking on-line as there are plenty to choose from.
    The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

    Comment


      #3
      Originally posted by zuby84 View Post
      1) Can (our) letting agent company sign the lease (and AT5 in Scotland) on behalf of the landlord?
      In England/Wales, yes. Scotland, I don't know.

      2) Who becomes liable for the safe upkeep of the flat - does the buck stop with the letting agency or is it still with the landlord? ie annual Gas safety checks - does the landlord still have a responsibility to ensure this is done annually or will the buck stop with this letting agency?
      E & W Landlord remains ultimately responsible.
      3) Is there any type of insurances this new "letting agency" will need? Apart from the normal business insurance for the office.
      Liability insurance in case they mess up? Ask in the Insurance forum further down the LLZ home page for a more useful answer.

      Basically; bit of a newbie when it comes to just what/and whatnot a letting agency can do in behalf of their clients and legally how much responsibility a landlord still has even when property is being "fully managed" by a letting agency.
      They can do everything the LL contracts them to do, but not draft legal documents for money or represent the LL in court.

      As a general rule, the LL is responsible for his statutory obligations. If he delegates these to the agent and the agent fails to meet them, the LL can be sued/prosecuted, but he can sue the agent for breach of contract/negligence.

      Suggest you seek work experience in a reputable letting agency before embarking on this.
      'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

      Comment


        #4
        Assuming it does not involve setting up a separate company, what you propose to set up is in-house management and so the law of agency does not have any application. Your employees will be just that and you will be responsible for their actions.

        Comment


          #5
          Originally posted by Lawcruncher View Post
          Assuming it does not involve setting up a separate company*, what you propose to set up is in-house management and so the law of agency does not have any application. Your employees will be just that and you will be responsible for their actions.
          Apologies for any confusion. I thought that* was what OP was proposing to do.
          'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

          Comment

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