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9:30 AM, 9th December 2011, About 13 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.
Previous Article
Rip Off Letting Agents Prey on Tenants
Mark Alexander - Founder of Property118
20:51 PM, 11th December 2011, About 12 years ago
Why don't you just refuse to pay the bill and let the small claims courts decide who is right? If I checked out of a hotel and they sent me a crazy cleaning bill I just say "see you in court". If they do take you to court, you are innocent until proven guilty so you get usually get the case transferred to your nearest magistrates court.
20:55 PM, 11th December 2011, About 12 years ago
https://www.facebook.com/groups/257812827583474/
21:05 PM, 11th December 2011, About 12 years ago
Mark we already have all of our evidence in place and we are not paying the charges. With limited contact with Campbell we are unsure of what is going to happen next? this has been going on for months now, the fact that Campbell never informed us of any problem until months after Katie had moved out leads me to believe it will go on for months more. We have a paper trail photo's and evidence to back everything up, lot's of students are saying on the FB page that they are now being threatened with court proceedings ............ i'm not sure if this is from the court itself or Campbell, but i hope someone........... anyone .......... will be in touch soon???
Mark Alexander - Founder of Property118
21:10 PM, 11th December 2011, About 12 years ago
Statute of limitations provides Campbells up to six years to bring this matter to court and they are within their rights never to do so. Similarly, you have the right to bring cival actions against them for harrassement.
21:16 PM, 11th December 2011, About 12 years ago
Well Mark i think we are just waiting for the small claims court action to be taken up? they don't harass us really in fact it's a little the other way? we wan't to get it sorted and they seem to be a little backward in coming forward?
Mark Alexander - Founder of Property118
22:19 PM, 11th December 2011, About 12 years ago
OK, understood. I am pleased you recognise that Campbells could also raise civil charges for harrassement and defamtion. It's a cruel world we live in isn't it?
This week I will be writing another article to question whether review based websites are at risk of publishing defamatory and unsubstatiated claims and whether they should allow unmoderated anonymous posting. As part of our research prior to modelling our property services directory we gave this matter a massive amount of consideration. I know Nick Parkin, who has posted here on this thread is absolutely gagging to have this debate and I suspect many others are too. Watch this space ....
7:50 AM, 12th December 2011, About 12 years ago
Mark, Surely the point shouldn't be "let them take you to court", but "be fair and reasonable in your charges in the first place".
Why should lettings agents be so un-regulated that they are able to charge whatever they like, try to bully people into paying and if that doesn't work take them to court...surely its all about being fair and reasonable.
If Campbell had turned round to me and said "OK, there was a bit of dust in the property so we had to get a cleaner in for afew hours which cost £80 - can you each pay us a tenner for cleaning?" I wouldn't have batted an eyelid. Instead, they tried it on - how much money could they take off us by being unreasonable. That, to me, is not ok.
Going to small claims isn't that simple, it can involve taking time off and there is no guarantee you will win, which could leave you with more costs. It shouldn't have to come to this.
Mark Alexander - Founder of Property118
8:22 AM, 12th December 2011, About 12 years ago
Hi Steve
Fay asked the question "what happens next?" I was answering that question. As I said, in paragraph 3 of my article " 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.
Paul Routledge
8:25 AM, 12th December 2011, About 12 years ago
As I said Ian a lot of smoke for there to be no fire and it is easy to defend maybe 1 or 2 allegations about you but 300.
The Agents in this case need to re-group make a full statement of fact evidenced properly with links to prove their reasons and readdress their policy of costing for damages and repair the damage.
I fear for them, that the longer this goes on the more will jump on the band wagon
8:31 AM, 12th December 2011, About 12 years ago
This article is a scary reminder of for all of us who use social media as part of our business plan of how badly wrong it can go. We can’t control the message on social networking sites like we can on traditional advertising and any of us could be a victim of some kind of anti-campaign, whether justified or not.
I have to admit, I have some sympathy for the agent for not wanting to take deposits. I know better than most that the bureaucracy surrounding deposit protection can be complicated and time consuming for busy agents and I really don’t blame them for wanting to avoid it, especially when, by offering to let tenants in without deposits, they were able to produce a business model with low upfront costs that was attractive to their student market. The trouble is that without recourse to a deposit, they were always going to struggle to enforce dilapidations against guarantor. It is one thing to make a claim on a deposit, even if that claim is complicated by deposit protection legislation, it is quite another to expect guarantors to pay out of pocket for damage after the tenancy has concluded. Guarantors, by their very nature, are likely to be older, wiser and more aware of their rights and, where student tenants are concerned, naturally protective of the guaranteed child. With the benefit of hindsight, recovering damages this way always carried a greater risk of high profile disputes and small claims actions.
With this in mind, perhaps the agent in this case should have given more attention to their inspection regime. I am not sure from the article whether inventories and inspections were carried out by a third party, but it is clear that some elements of the reports were disputed by the tenants. Disputes that might well have been avoided if the agent had obtained professional, impartial reports backed up by high quality evidence.
When I worked as a deposit protection adjudicator, deciding claims over damage, the majority of disputes that crossed my desk hinged on the interpretation of inventories and check-out reports and it was apparent that a few notes and photographs were not sufficient to protect the interests of landlord or tenant. Since leaving that job I have helped develop a way of producing inventories with corroborating video evidence that is so certain and fair that it would make this no-deposit business model viable. When using video there can be no question about whether a carpet stain was present at the beginning of the tenancy, or which room a mattress protector was in at the time of the report because it is all there on film, and while photographs can easily be tampered with on the average computer, you need a giant post production facility and a budget the size of Disney to fake video evidence.
Agents are often stuck between a rock and a hard place when it comes to disputes over damage. Both landlord and tenant are their customers and they stand to lose one or other, or even both, if they don’t handle disputes properly. Agents used to think that tenants come and go, whereas landlords stay, and would naturally side with landlords in order to keep their instruction, but this article shows that those days have gone and with the advent of social media, tenants now have the ability to do something about it if they feel mistreated. Agents these days need to be absolutely certain that they are protecting landlords, tenants and themselves by providing a scrupulously fair, professional quality inventories and reports.