A couple of ARLA related questions and best practice

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    A couple of ARLA related questions and best practice

    Hello all,

    Couple of questions which came up in recent conversation.

    Do ARLA insist on an independent inventory and schedule of condition being carried out, i.e. not by the landlord?

    Do ARLA state that you are not allowed to take a bond/deposit/holding fee other than your agency fee before the tenants have been fully referenced? If this is the case, how would you protect yourself/the LL from a tenant opting out of the tenancy suddenly?

    Finally, does ARLA state that tenants are allowed to take up to seven days to sign the inventory and schedule of condition?

    I am going to have a look on the ARLA site now but would appreciate it if anyone knows the answers, or indeed have any thoughts on best practice. Views from tenants, landlords and Letting agents appreciated!

    Kind regards,

    John
    Last edited by Editor; 25-04-2008, 20:26 PM.

    #2
    Originally posted by MaverickPropertyManagemen View Post
    Do ARLA state that you are not allowed to take a bond/deposit/holding fee other than your agency fee before the tenants have been fully referenced? If this is the case, how would you protect yourself/the LL from a tenant opting out of the tenancy suddenly?


    I don't know what ARLA say generally,

    but under OFT guidance, you can only claim reasonable and justifiable administration expenses when a tenant opts out of a tenancy before signing. You cannot keep, say, a whole months deposit as a penalty for 'messing you about'. What is not justified must be refunded.
    All posts in good faith, but do not rely on them

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      #3
      Originally posted by Bel View Post
      I don't know what ARLA say generally,

      but under OFT guidance, you can only claim reasonable and justifiable administration expenses when a tenant opts out of a tenancy before signing. You cannot keep, say, a whole months deposit as a penalty for 'messing you about'. What is not justified must be refunded.
      Apologies, I didn't quite make myself clear.

      I didn't necessarily mean that the whole amount would be kept. For example let's say that two tenants pay £50 each agency fees, and also pay a bond/deposit of £300 each for a tenancy starting in over a months time.

      Would ARLA/the OFT and anyone else of importance allow the bond to be collected before referencing would have been completed?

      Naturally if the tenants failed referencing/dropped out of the contract then a reasonable fee could be kept.

      I guess this brings up an interesting point of what is reasonable. If a tenant changes their mind the day after then just a £50 agency fee could be reasonable, however if they have placed a holding deposit six months in advance for a property and then drop out the day before then you could easily argue the whole deposit and agency fee would be reasonable. In reality you would probably have a signed contract by then though.

      Thank you for the OFT part, I wasn't aware of that although it would certainly come under common sense and fairness!

      Kind regards,

      John
      Last edited by Editor; 25-04-2008, 20:26 PM.

      Comment


        #4
        The answer is speak with the compliance dept on 01926 496800 who will be able to guide you. That's what they are there for!
        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.

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          #5
          Excellent - Thank you

          Comment


            #6
            Originally posted by Paul_f View Post
            The answer is speak with the compliance dept on 01926 496800 who will be able to guide you. That's what they are there for!
            They refused to help, as I am a non member.

            Kind regards,

            John

            Comment


              #7
              Sorry! I thought you were a member of ARLA.
              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


                #8
                Originally posted by Paul_f View Post
                Sorry! I thought you were a member of ARLA.
                No, I probably didn't make that clear mentioning ARLA so much. I am not overly interested in joining ARLA mainly due to the cost involved but I do feel that they are probably the leading 'voice' in best practices.

                What I am trying to do is make sure that all of my terms are actually fair, and set down in writing although it doesn't seem like that many people really do this.

                Kind regards,

                John

                Comment


                  #9
                  Originally posted by Wickerman
                  Look on the NAEA website - their code of conduct is quite comprehensive and may give you some pointers.

                  Here is a quick one for anybody out there that has a seperate client account for rent money - say a Lettings Agency is taking card payments using a merchants service. Say the rent is £500 and the card charge is 2%, eg £10.

                  £490 is therefore credited to the client account.

                  Would best practice be for the LA to transfer £10 from the office account into the client account to make the rent back up to £500?

                  Obviously you could not pass the cost of money handling on to your landlords but just wondering how agents would do this.
                  I don't process card payments because of the costs that you have just highlighted but there surely must be an option to charge the 2% to another account, as otherwise it would create havoc with your accounts.

                  Secondly, I don't see how anyone can justify not having a separate client account!

                  Kind regards,

                  John

                  Comment


                    #10
                    Originally posted by MaverickPropertyManagemen View Post
                    I don't process card payments because of the costs that you have just highlighted but there surely must be an option to charge the 2% to another account, as otherwise it would create havoc with your accounts.

                    Secondly, I don't see how anyone can justify not having a separate client account!

                    Kind regards,

                    John
                    My letting agency charges the tenant an extra 2% if using a credit card.
                    Now signature free.

                    Comment


                      #11
                      Originally posted by Wickerman
                      I am in the same boat - got all the necessary PI and other insurances and have seperate client account (makes life much easier, and more complicated at the same time!) however have not yet joined NAEA/ARLA (although the paperwork is filled out and ready to be sent off, and has been for months). I do not believe there is a requirement for a letting agent to have a seperate client account (indeed took a lot of effort to get the bank to open one for us) however it would be a requirement of ARLA/NAEA.
                      I think it is a good requirement of ARLA to ask for a client bank account, separate from the trading account as it isn't very healthy to mix the funds! I have my client account verified by the bank as a client account and they state that they won't count money in this account against any debts if I go bust.

                      I would be interested to know what CMP insurance does extra to this? Is this if I run away with a lot of money, then the insurance scheme will cover it?

                      I only reason I would join ARLA is to put the sticker in my window, but it is an expensive sticker. It is possible to run a letting agency at a very professional level without ARLA, but how do you prove it to your clients?

                      I am very interested in joining my local one though (ALMA) as I think their advertising is worth it!

                      Kind regards,

                      John

                      Comment


                        #12
                        You could do a few arla courses have the certs hanging on the office wall then advertise in your window you are ARLA trained and have the word ARLA in a similar colour and font, as long as you dont lie when asked wheres the harm.

                        Comment


                          #13
                          I'm a little confused...

                          Are you saying that you could complete an ARLA course, replicate their logo but not join and then kind of pretend that you are an ARLA member?

                          If that is what you mean then it seems like a terrible idea!

                          If up didn't mean that, then apologies.

                          Kind regards,

                          John

                          Comment


                            #14
                            Originally posted by MaverickPropertyManagemen View Post
                            I'm a little confused...

                            Are you saying that you could complete an ARLA course, replicate their logo but not join and then kind of pretend that you are an ARLA member?

                            If that is what you mean then it seems like a terrible idea!

                            If up didn't mean that, then apologies.

                            Kind regards,

                            John
                            No i didnt quite mean that but it seems quite common pratice for non Arla agents to advertise they are ARLA trained. Which i suppose is the next best thing after a ARLA member. Just because you might choose to use red lettering as well doesnt mean you are pretending to be one. Though it it not the best example look at the supermarkets with their own brands using similer packaging to the named brands.

                            I am not at all sugesting anyone trys to pretend to be a member ARLA but rightly or wrongly it is respected and i dont thing there is anything wrong with stating you are ARLA trained. i know how hard it is to become a member because my company is.

                            Comment


                              #15
                              Who'd want to replicate their cheesy out of date logo in any case

                              Thers's nothing wrong with having qualification certificates mounted on the wall.

                              I don't think ARLA has much of a reputation in any case as they don't check their agents (other than the financial check).

                              The NAEA Technical Award in Residential Letting and Management is the qualification to get.

                              Comment

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