The 21st Century Letting Agent – Protecting the Landlord’s Interests

Roger, this is a really interesting article and most of it I support wholeheartedly, however, there are two points I would question:

1) "Pay the landlord the following week" - I am curious why you suggest the following week and not within 24 hours?  We always credit our landlords bank account the same day the payment arrives, so 24 hours is still allowing plenty of time.  We arrange for the payments to be made five working days early to allow for weekends, bank holidays and the lengthy time the banks sometimes take to transfer the payment.  This therefore, ensures the landlord receives their rental payment on the day it is due.

2)  "Collect all Private Tenancy rent by DD"  Although I totally agree with the reasons you give for collecting the rent by this method, I feel I should just mention that I believe it is not something that many smaller agencies would be able to do.  The reason is because for an organisation to become 'approved originators' of direct debits, it is a requirement that the beneficiaries are subjected to careful vetting procedures – and, once approved, they are required to give indemnity guarantees through their banks. This meant that the beneficiary must be able to produce confirmation from their bank that there remains a constant 'float' of considerable size.  This may have changed in recent years, and the rules and regulations for becoming an originator may now be more manageable for smaller organisations, I hope so and it is something we are certainly going to look into in the hope of changing from standing orders to direct debits. 

Having said all this, I still think it is a really good article.

Hi Jan

Regarding your second point, there is some really useful information over on the Property Tribes forum about collecting rents and how small landlords and agents can now do this without having to jump through all the hoops that you have mentioned. There are plenty of providers mentioned and linked to in the discussions. I hope you find this helpful. Link to a recent Property Tribes discussion about this, there are several others too, can be found below. I have also Tweeted the link.

http://propertytribes.ning.com/forum/topics/collecting-rent-from-tenants 

That's great Mark thank you for this information and the link.  We'll check out all the info' about direct debits that you refer to that is on PT soon and see if we can take on DD's - it sounds as though things have moved on since I used to deal with SO's and DD's. 

Roger,

Do you think a 21st century letting agent should include rent guarantee insurance, as well as malicious damage insurance in the standard charge?
 
(I am starting to think this insurance should be provided by the agent, as the actions/skill of the agent has such a great effect on the risk – a good agent should be able to therefore source the insurance for a lot less than most landlord can.)

There is no way a LA would have this as they know a vast amount of their applicants pass the normal credit checking but would fail a RGI check.
Indeed you may have seen LRS advising they were sending out tenant alerts for tenants who had passed credit checking on the same day.
The RGI companies are therefore starting to realise the importance of network referencing in addition to  normal licensed credit checks.
Remember if the tenant sourced by the LA turns out to be a wrongun; the LA response is to say they passed credit checking and wash their hands of the problems the LL then faces.
Which is why RGI is crucial.
I would imagine that a LA who offered tenants who all pre-qualified for RGI they would attract a lot of business from LL.

Hi. Thanks for the compliment. Much appreciated. Mark has dealt with your second point in much more concise and efficient manner than I could possibly do so thanks Mark.
For small landlords paying on day of receipt (clearance of Funds) is perhaps OK. As a larger landlord I would much rather receive one payment each week plus a report detailing the breakdown than a large number of small payments. Keeps bank charges down while still protecting me. I quickly know if a payment has been missed whereas a day to day payment missing could easily be overlooked. A regular weekly payment  I feel is quite adequate for most landlords
Roger

Hi Ian. Interesting concept but in my experience RGI is not always what it is cracked up to be and much prefer a rent guarantor as I detail in the next section of this article. Almost easier getting the money from a guarantor than the RGI underwriter.
Roger

Hi Paul
Good point well made. This is why selecting an LA that adopts the standards I am setting out here should be a priority for Landlords. Trouble is that Landlords go for the cheaper option a lot of the time and get exactly what they pay for. Running a top quality agency does not come cheap. Neither does RGI.
Roger

You can get RGI on a rent guarantor with no problem
There are numerous offers out there.

Fraid I have to disagree with you on RGI sourced by LL for their tenant or a tenant guarantor.
£99.00 for the first year £89.00 subsequent years providing nothing changes on AST.
To me that is not expensive to be covered for £50000.00 per claim including legal costs and for about 2 months after tenant has been evicted whilst any repairs are carried ot to property to make it lettable.
Do you know where I could get it cheaper!