Letting Agent Ripped Apart by Social Media

Letting Agent Ripped Apart by Social Media

9:30 AM, 9th December 2011, About 12 years ago

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I am writing this blog to balance out another article on this website and to raise a question about whether it is reasonable for a business to be exposed to a trial by social media.

Is it even possible that a group formed on Facebook could muster up enough support to potentially bring an established business to its knees without a fair trial? Until this week I would have thought not but I have evidence that it is happening right now.

Now I’m not taking sides here, nor do I want to be a judge or a jury in a case that doesn’t effect me or my business. However, I am aware of a scenario whereby one persons word against another has been escalated to a point that could result in the collapse of an established business.

Is it right that media attention mustered up by a small group of disgruntled students and their parents could result in the suspension of a letting agent from a variety of trade organisations without a case ever going close to a court room?

The problems started when letting agent Campbells Property made a financial claim against a guarantor of a student who had allegedly soiled a mattress. The student denies the allegations and the guarantor refuses to pay the disputed damage claim.

I have spoken to a Director at Campbells who has confirmed their policy is not to take damage deposits. Instead they charge a none refundable letting fee of £220 per student and take guarantees from parents or an alternative guarantor to pay for any damages and any necessary cleaning to put the property back into a lettable condition at the end of the tenancy. Victoria campbell, a Director of the firm, told me “these terms of business are willingly entered into by around 1,500 tenants and guarantors every year with Campbells”.

The disputed bill for the soiled mattress has escalated to the point where a facebook page has been created to solicit more complaints against the letting agent. People thought to be posting in defence of the agent have been blocked from posting and had their posts removed. A completely independent letting agent was blocked mistakenly and reported this on Property118.com. He was commenting completely independently without taking sides and made this point on property118.com. He very quickly received a public apology (also on Property118.com) from the creator of the facebook thread.

To my knowledge the number of complaints equates to less that 1% of all tenants that let throughCampbellslast year. Despite this, the agents business model has been criticised to a point that the owners don’t know which way to turn.

The letting agent has been suspended from two organisations they subscribe to and now need to account for these complaints during their busiest season for letting. Note that first year students often seek accommodation 10 months in advance to secure a roof over their heads for their second and third years in university education. Some universities only allow agents that have valid accreditation to advertise to their students. Suspended agents are not allowed to advertise and their suspension is publicly displayed.

In the meantime, whilst their cases are being prepared and heard by the trade associations, the agent feels aggrieved that the reputation of their business has been besmirched to the extent that they will find it far more difficult to attract students and fill their properties in the coming year. Even if the trade organisations to which they subscribe find in their favour on every one of the complaints levied against them they stand to lose a significant amount of income and reputation whilst the case is under investigation and their memberships are under suspension.

Will the trade organisations take responsibility for any financial losses or defamation?

Is it right that a letting agent can be held to ransom by an aggrieved client in this way?

Will the trade associations risk finding in favour of their member with such financial implications as a potential court case against them by the agent on the grounds of lost income resulting in defamation of innuendo during their suspension?

From my very limited understanding of the cases in point, the agents procedures may be flawed. If I am right, they would be unlikely to be awarded the right to retain deposit moneys if they had taken them and the complaints had gone to arbitration. On this basis, I also doubt that the agents procedures would hold up to a small claims court hearing for the financial claims levied.

My understanding of the agents procedures in this case is that detailed inventories are completed, together with photographic evidence, at the commencement of each tenancy and are signed for. Inventories are also completed at the end of the tenancy and further photographic evidence is also collected. The possible flaw I can see in this procedure is that the end of tenancy the inventory is very rarely signed for as they are completed after the tenant has vacated. Therefore, it’s easy for disputes to arise and if there are two sets of photographs, one from the agent, the other from the tenants, which is to be believed?

In most cases it’s easy for landlords to demonstrate with a good inventory and photographic or video evidence when a property has been damaged, regardless of whether the tenant signs the checkout inventory or not. This is because most properties and their contents are very different. However, when there are several identical rooms within properties and the disputed damages relate to a carpet stain, a soiled mattress or a damaged piece of furniture, how can a decision as to whether the damaged item was actually the one in the room that’s subject to a damage claim? Who’s to say that mattresses were not switched between rooms by tenants or the agent? Who’s to say that either set of pictures taken even relate to the same room?

I have asked myself whether I would have joined the trade associations at all and put my business at risk in this way if I were a student landlord. However, if the best way to advertise to students was to be a member of the trade associations what choice would there be?

I would be very interested to hear what Inventory Clerks, Letting Agents and other student landlords feel about this case.

 


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Comments

Ben Reeve-Lewis

10:30 AM, 10th December 2011, About 12 years ago

The Resolution Foundation just yesterday produced a report recommending a single regulatory body for letting agents and there are posts on this very website from agents also calling for the same thing Madalena.

And yet all that happens is new standards being overlayed on existing ones. Boris Johnson is now looking into a London wide Blue badge scheme for agents. We need less regulation not more.

I was pleased when I saw 'Safe-Agent' come into play and straight away did a search of affiliated agents, and yet right there, in my working area was one of our well known ones whose name comes up most weeks in connection with something or other, people I would trust to run a bath.

Letting agents are supposed to be property professionals. People a landlord goes to to find tenants and set up a letting, hopefully leaving the landlord to put their feet up and/or concentrate on something else. Tenants too, approach an agent to find them a property and to be their mediator with the landlord in all matters. An easy enough task so why does the experience of so many landlrods and tenants cause them to take such a dim view of agents?

Solicitors have a single regulatory body. You can go on the website, check the person is registered and when they qualified and they can be struck off for malpractice.

Decent agents would have nothing to fear from being subject to a single regulatory body and framework and the dodgy and downright criminal ones would be forced out of business overnight. Its such a no brainer.

Vanessa Warwick

10:48 AM, 10th December 2011, About 12 years ago

Ben, I believe it is important to understand that #SafeAgent is a mark of a company that use client monies protection. That is all. It does not denote any other standard than the fact that the landlord and tenant's monies are protected by an official scheme.

I think it is also worth noting that using a lettings agent does not divest the Landlord of any responsiblility. The Landlord is ultimately responsible for anything that goes on in their property, not the lettings agent. So I see the focus on Landlords acting as a barometer for the good and bad agents, by sharing their views on sites such as this. The hive mind of the Landlord community can influence the sector. Too many landlords though are interested in the rent cheque, but not being engaged or understanding or learning about their business. If more of them took a professional stance, the whole BTL arena would be forced to become more professional by default and the community could self-regulate.

11:12 AM, 10th December 2011, About 12 years ago

I agree Ben, I do think with the prevalence of the PRS, there needs to be complete reform and a rethink on policies and it needs to be filtered down to local authorities and police.

This year, I covered a story of a landlord who arrived at an apartment block he owned with some 'hired help' to persuade the residents, some with young children that they needed to leave immediately. This particular landlord ( I cannot name unless I end up wearing concrete shoes) had not issued any eviction notices and was in desperate need to clear the building as the sale of the property was dependent on the block being empty.

He then disconnected the gas supply and threatened the tenants. Transco was called to cap the gas supply and called the police. However the police stated that it was a civil matter and not a criminal one. As you know Ben, this was indeed a criminal offence under the Protection from Eviction Act 1977. Yet no-one cared.

I had the matter brought up but it was too late. Luckily for the tenants, the rest of the private landlords in the area sympathized and rallied round to find them somewhere, foregoing deposits and up-front rent.

Ben Reeve-Lewis

11:15 AM, 10th December 2011, About 12 years ago

With you on all points Vanessa. Tenants too should be more savvy about renting. I have 2 local scam agents operating who have managed to take rent and deposit up front from people who didnt even get inside the property to view it. A testament to the persuasion skills of the agents but also to the cluelessness of the tenants.

I know Safe Agent is mainly proof of client protection but I see it being bandied about as if it is generally safer. Money protection is no small thing to have but doesnt in itself make a reliable agent overall.

When you complain of landlords not being engaged in or understanding their business I think this is because so few landlords see it as a business at all, that is why they go to an agent in the first place.

I rarely get complaints of harassment and illegal eviction made to me about portfolio landlords who do understand their business and as a result, rarely use agents. The legal breaches I deal with are almost totally committed by small amateurs who dont think of being a landlord as a business. Agents should be the pros in the field that do the business stuff for those landlords but standards, quality of service and knowledge of subject are so often very poor

Ben Reeve-Lewis

11:20 AM, 10th December 2011, About 12 years ago

Madalena we havent exchanged before so I dont know if you know my job. I'm a Tenancy Relations Officer for a London council prosecuting landlrods for harassment and illegal eviction. Sorry to say this but the tale you tell is one I get involved with around 3 times a week. Its not even a very bad one to be honest.

The police are the bane of my professional life. I wish they would just not turn up. It would my life so much easier.

Good on your local community of landlord's though. that's a tale that needs wider publicity

12:11 PM, 10th December 2011, About 12 years ago

Why would someone down thumb this comment? surely asking for a meeting to sort things out is a good thing??

Gareth

13:29 PM, 10th December 2011, About 12 years ago

Great thread, but feel sorry for the parties caught up in the issue (Fay/Katie and, to some extent Victora Campbell).

I wanted to comment on something Vanessa said about using http://www.safeagents.co.uk/. It peeves me to see these self-appointed property industry gurus set themselves up as self-regulatory organisations and charge agents fees to register the fact that they (the agent) have a client money protection scheme in place to protect tenants' deposits.

I have started up a letting agency called Angels Property Services and I have set up 2 client accounts, recognised as separate to my business accounts by the bank (and I have a letter to prove this) whereby if I or my business went bust, the money in those client accounts would be ring-fenced and unaffected by my bankruptcy.

I don't belong to ARLA or RICS or NAEA because I'm a one man band and I haven't studied for their "qualifications"...yet I have been a landlord in the frontline of letting for over 15 years and have more experience and knowledge of the laws than any 18-40 year old working in the the letting industry. But without their "qualifications" I cannot join their self-regulatory bodies and thus don't have access to their client money protection schemes.

For those of you that don't know what a client money protection scheme is, it's merely an insurance policy that pays out in the event of fraud against the client money account by staff or management of a letting agent. I've been trying to find some way of buying my own client money protection insurance but I'mhaving difficulty finding someone to cover me. So I go with the approach that as I'm an honest and ethical person...I know that if I was stupid enough to run my business so badly I ended up going bankrupt, I would say to myself that what I did was my fault and at no time touch the deposits of the tenants or the rental money due to the landlords in order to help save my business...which is the opposite of what distressed letting agents are doing (EVEN IF they belong to a professional body - ARLA membership does not mean the agent is not at risk of going to the wall and taking the client money with it!).

So personally I refuse to join the Safe Agents database and pay them their fee...and in fact I couldn't anyway because I don't have client money protection insurance (which is what they state the agent registering must have). I have only my honesty and integrity in dealing with 3rd party money.

Mark Alexander - Founder of Property118

13:43 PM, 10th December 2011, About 12 years ago

I am not questioning your integrity Gareth but your business model would concern me if you were managing my properties and tenants deposits because I would be the one responsible for repaying them if anything went wrong. In the absence of an insured scheme the deposits should, by law, be placed into the custody of the DPS. Why would you insist on holding them in an account to which you had access? Alternatively, why don't you advise your landlord clients to retain the deposits and set them up with their own "My Deposits" accounts? Many landlords beleive that they can contract their legal obligations regarding deposits to their agents but the law says different.

Gareth

14:04 PM, 10th December 2011, About 12 years ago

Mark.

I am well aware of the law regarding deposits...I myself had issues with agents in this regard and I'm the one telling them what they have to do! Some of them still don't get it! Any posit can be misinterpreted by a reader, as has happened here, so just to reassure future readers I'll add that as the agent, any deposits held in my long term client account number 2 (for deposits), would be registered with MyDeposits.co.uk and the tenants and landlord would receive all the paperwork related to the registration.

As you rightly say, the alternative would be to set the landlord up with a MyDeposits account (if they don't already have one) and then I would pay the money to MyDeposits directly rather than let the landlord do it. They are busy people and 14 days was never long enough for them to register it in some cases. Going forward this will change to 30 days to register, but as agent I just don't want to run the risk of a landlord "forgetting" to register it, if you know what I mean.

Mark Alexander - Founder of Property118

14:07 PM, 10th December 2011, About 12 years ago

Phew! Thanks for adding that essential piece of clarification Gareth, I was getting very worried for you there my friend.

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