Protecting a Rental Business Against Rogue Letting AgentsMake Text Bigger
Dozens of letting agents have gone bust in recent months leaving landlords struggling financial with unpaid rents and unprotected deposits.
In some cases the letting agents are just poor business administrators, but several have ended in court for deliberate and calculating frauds involving the theft of hundreds of thousands of pounds of money belonging to property investors.
This guide gives some pointers for spotting a letting agent in trouble – and gives advice about protecting your cash:
- Only deal with an agent that belongs to a money protection scheme – this means members of ARLA (Association of Residential Letting Agents) or SafeAgent. Don’t take their word for it – check the websites or phone the schemes to make sure they are not lapsed members or just plain crooks.
- Ask for confirmation any deposits are protected in one of the three government-authorised schemes.
- The letting agent will hand over a notice with a registration number as proof. This can be checked online to verify the cash is protected.
Landlords are financially responsible for returning deposits if the letting agent goes bust
- If you have rent guarantee insurance, make sure the tenants are referenced before they move in or the policy is void.
- Get in to the habit of checking off rent payments against back statements – late payments are a sign the agent is in financial problems and some have been known to send out statements with transferring the cash.
- Don’t accept excuses and keep the pressure on until you are paid.
- If you ask for a rent guarantor, only take someone who has something to lose, like another property owner – you are more likely to get your money back
- Keep good records and always try and deal in writing so you have an audit trail should you have to take legal action later – that means dated copies of letters, emails and other correspondence.
If letting agents can’t or won’t hand over money or documents, then think about transferring to a more reputable firm sooner rather than later.
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