Setting up as an agent?
9:15 AM, 16th August 2024, 2 years ago
8
Hi, I have a friend who has had too many bad experiences with letting agents and sick to the back teeth of them not doing what he pays them to do.
He has approached me to look after and manage his property on his behalf – exactly on the same basis he would employ an agent. He can either find the tenant himself or I do this for him. Contract between him and tenant only. Rent gets sent to him directly. He will receive the deposit but I will log it in his DPS account and I will serve the tenant the PI etc.
I will take his instruction if he wants to increase the rent and deal with associated paperwork and communication with the tenant. I will be the first port of call for the tenant and deal with getting any contractors in to do repairs etc. I will carry out regular landlord checks and report back to him.
Basically run manage his property as I manage my own. He pays me a set fee each month and anything additional as and when the occasion arises. (eg if he has to have a selective licence for example and wants me to apply for the licence). I already have the Information Commissioner’s Office (ICO) registration.
So do I need to set up as an official agent in some way – or would I simply be his be his ‘representative’? I would not deal with any evictions etc, just make sure all paperwork was served correctly to allow him to do this either himself or employ someone separately to do. Do I still need to register with the Property Ombudsman or another body?
Anyone do something similar and have any guidance/advice?
Thanks,
Reluctant landlord
Tags:
how to set up as an letting agent, letting agent alternative, private landlord representative, private landlord support, Property management, rent collection, selective licence application, tenancy agreement management, tenant deposit management, tenant management services
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Member Since January 2020 - Comments: 559
10:54 AM, 16th August 2024, About 2 years ago
If you are to act as agent then you need the following:
Property Ombudsman registration
HMRC AML registration
PI insurance
ICO registration
Terms of business
You might be friends now, but if things go wrong you could be in trouble. It’s not worth trying to do someone a cheap favour – why can’t he use a proepr agent that’s already in the system?
Member Since October 2020 - Comments: 1134
1:15 PM, 16th August 2024, About 2 years ago
You may also need a protected client money account and would share liability for any deposit penalty awarded to a tenant.
Member Since September 2018 - Comments: 3504 - Articles: 5
5:02 PM, 16th August 2024, About 2 years ago
Reply to the comment left by Graham Bowcock at 16/08/2024 – 10:54
would this all be necessary/applicable if I were simply acting on his behalf and not an agent then?
Just googled the HMRC AML registration bit and it states only applicable if…………
letting agency businesses (with individual monthly rents of €10,000 or more)
His one property doesn’t receive that same amount in a year??
Member Since January 2020 - Comments: 559
10:45 AM, 17th August 2024, About 2 years ago
If you’re acting on his behalf then you’re his agent.
Member Since August 2024 - Comments: 40
11:51 AM, 31st August 2024, About 2 years ago
As my online name suggests I’m somewhat of a rookie landlord. It would be interesting to know what issues your friend has encountered with his previous agents. I let my one and only property out through a lettings agent. I’m in 2 minds whether to manage it myself. However here are the pros and cons as I see them with my current agent.
Cons
1) I pay 10% of my rental income to them.
2) When it comes to maintenance I find that I am overcharged, so I generally organise maintenance myself.
3) Additional fees such as those gor a new contract
Pros:
1) I have an online portal which enables me to see all my property related information (documents, statements, visits, etc). The portal also gets updated with information pertinent to landlords such as changes to the law or relevent articles etc.
2) I have peace of mind that I am compliant
3) The lettings agent does all the background checks, references, right to rent check, credit check, etc and often has good information on potential tenants who may have rented through them in the past.
4) They advertise your property and help you choose a good tenent. My property was re-tenented within 2 days. Although the agents didn’t tell me which tenent I should take they helped me greatly when making my choice. My 2nd tenent is due a new contract very soon and I couldn’t have made a better choice
5) They have a good understanding of the market and are able to advise on the appropriate rent to charge, the times of the year when you might not get optimum rent, etc
Member Since October 2020 - Comments: 1134
11:03 AM, 1st September 2024, About 2 years ago
Reply to the comment left by Rookie Landlord at 31/08/2024 – 11:51
“I’m somewhat of a rookie landlord.”
“I’m in 2 minds whether to manage it myself”
Those two statement don’t really work together. To me, your choices are
1) join a landlord association, do some training, read everything on their website and then consider self managing
2) carry on using a managing agent.
Member Since June 2013 - Comments: 582
5:16 PM, 1st September 2024, About 2 years ago
Reply to the comment left by Rookie Landlord at 31/08/2024 – 11:51
`I’m in 2 minds whether to manage it myself.`
We are all rookies at the start of anything we attempt and there is no shame in that at all . Then we may become competent in time and then we may go on to excel even and become an expert . So yes go from rookie LL to being a rookie LA but you need to be conscious of the legal stuff which if you fail at can land you with 30K fines or prison . Now many think well I dont want the responsibility so they put it with an LA and they can rest easy. Wrong. Because some LA`s dont do a very good job and if they don`t the buck still lands with you . If they fail to get the gas cert done you still get prosecuted . So its in your best interest to read research and learn whatever route you decide to take . A self managing LL is in effect a letting agent anyway in all but name . I self manage as i dont want to be forever chasing a middle man for something I am ultimately liable for anyway .
Whatever you do ensure you are covered for the mandatory legal stuff and you will be fine . You may still be a poor people manager of contractors and tenants – but at least you are competent at the legal paperwork side of it and wont be put in prison. Good Luck
Member Since April 2021 - Comments: 189
9:45 PM, 1st September 2024, About 2 years ago
If you charge money then you are a professional agent and will soon require qualifications as well as all of the above. You should also get a handle on agency law – Tessa Shepparson did a good talk on it during lockdown and it was an eye-opener
And say goodbye to your friendship, you really don’t want to mix them unless it is fully professional and even that has risks
My advice is help him find a decent agent, sounds like you’re trying to cut corners and make a bit on the side which is a recipe for disaster. I can see you’re trying to help your friend but there are countless threads on here where something like that has gone wrong