The Ombudsman has ruled, fair or not, you decide ….

by Readers Question

18:28 PM, 21st May 2013
About 8 years ago

The Ombudsman has ruled, fair or not, you decide ….

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The Ombudsman has ruled, fair or not, you decide ….

The Ombudsman has ruled, fair or not, you decide ....I previously posted information about a problem Estate Agent who had let my property in Dover to a family on DSS with 7 children contrary to my instructions of no DSS tenants and no pets. I was very specific about my requirements due to a nightmare and costly experience with a previous tenant on DSS who trashed my property.

On discovering that my agents had disregarded my instructions, I wrote a complaint to them holding them responsible for any loss of rent or for the cost of any repairs and evicting the Tenants or re-letting the Property. This culminated in a “desist” letter from a solicitor and immediate termination of Estate Agent services. I had also contacted the Ombudsman and after six months of waiting I finally received their report.

The Estate Agents denied that they had been informed of no DSS tenants and claimed that the tenants had never been on benefits; also that they had informed me by telephone that the tenants had 7 children and that this had been acceptable. Work had been required on the property but they considered these to be maintenance issues and they muddied issues of documentation which had not been provided despite repeated requests. They claimed that the property had been well managed until my unacceptable complaint which led them to withdraw services.

The Ombudsman confirmed that there was evidence that the instruction had been given and I had reminded the Estate Agent by e-mail of instructions prior to the contract with tenants. There was information in the contract which indicated that the tenants were on benefits and the DSS status of the family was recently confirmed by Dover District Council. The contract clearly states that there are 7 children and apart from the agents assertion that I agreed to this by telephone, no details were provided about the telephone call. (This telephone call never happened!!)

The Ombudsman considered that the Estate Agent had not followed my instructions not to accept tenants in receipt of DSS benefits and had not informed me of all relevant information about the Tenants at the time of application. Also supported was my complaint that the agent had not provided me with a copy of the Tenancy Agreement.

My insurance also is nullified and a suggestion of negotiation with insurance was made.

As regards compensation, the Ombudsman considered that it is the tenant’s responsibility to keep the place in good order and to pay costs of court action re: eviction. Likewise, eviction/re-letting costs are down to the landlord. The Ombudsman agrees that there has been aggravation and distress because of the performance of the Estate Agent and awarded £300.

I have the choice of accepting the award and the case will be closed, taking legal action or asking for reconsideration based on new evidence.

So while the Estate Agent walks away duly criticised and chastised, I am once again faced with a family with 7 children on DSS.

As there are no large properties for rent in Dover and Housing will not rehouse until the bailiffs intervene, costly eviction proceedings are on the cards.

The house is neglected and the entire house (5 floors) will have to be re-carpeted and redecorated. This cost me £13,500 in 2011 and is likely to exceed this amount.

I am not sure whether there is any room for manoeuvre and will be grateful for any advice that can be provided.

Thanking you.

Linda Lines


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Comments

Mark Alexander

18:32 PM, 21st May 2013
About 8 years ago

Hi Linda

Based on what you have said this ruling is ludicrous in my opinion and given the amount of money at stake here I would be taking this to a solicitor with a view to getting professional advice and dragging this battle to the Courts.

If I were you I would take this to Paul Shamplina at Landlord Action. His business Partner Justin Selig can help with litigation to recover damages from the agent as well Paul helping with the eviction. In case you didn't know, Justin Selig is the lawyer behind our Class Action case against Bank of Ireland.

For more details and a contact form please see >>> http://www.property118.com/tenant-eviction/39099/

21:56 PM, 21st May 2013
About 8 years ago

So you use a LA who you pay management charges to.
They ignore your instructions and leave you with a £13000 refurbishment bill
Tenants to evict at X cost
Unrecoverable losses from tenants
Void losses whilst property is refurbished.
You receive £300 compensation.
Now you face being in a position NOT to take HB tenants on again and only take on those who can pass RGI checks.
These fraudster LA have effectively destroyed this particular property as a viable business for many years.
It will take ages to recover the losses if ever.
Despite you knowing what you wanted; because you knew the pitfalls, your instructions have been ignored by this fraudster LA.
This surely must be breach of contract and would require far more compensation than the derisory £300!!!
It is a disgrace the way you have been treated with so much disregard by the PO.
This situation could easily happen to other LL who are ignored by the instructed LA; who carries on knowing not a lot will happen to them in the event the tenants they obtain against your wishes cause problems.
The rogue LA are a law unto themselves with seemingly no proper redress against them.
Perhaps all instructions should be confirmed by email.
Otherwise the LA can lie about phone instructions and I would NEVER trust a LA.
Yours is a salutatory lesson to other LL.
The sooner LA are regulated the better I think!

Sally T

22:13 PM, 21st May 2013
About 8 years ago

As landlords we've not been in this situation, but if we were we wouldn't settle for £300 after coming so far.
You've written
'the Ombudsman considered that it is the tenant’s responsibility to keep the place in good order and to pay costs of court action re: eviction'.
Quite simpy if the estate agent had rented to the correct people in the first place you wouldn't have to be incurring the cost of the eviction, so they should be made to cover the cost of this as it's quite clear that people on DSS wouldn't be able to afford it.
I also think that if you contact enough landlords you could prove tenants on DSS tend to leave properties in a greater state of disrepair and the estate agent should be made to cover these extra costs.
You've won the battle, it's now time to win the war !

John Bolland

4:27 AM, 22nd May 2013
About 8 years ago

Typical LA let at all costs for the fees attitude here. Benefits can be a minefield so needs defining perhaps to Unemployment Benefit since a family with 7 children would get loads of benefits like child allowance, FIS, etc. And we have coming Universal Benefit that presumably includes child allowance,

We steer well clear of DSS, Smokers and Pets as experience is generally that they are bad news and do not respect property and with 7 children screaming about in a property mega dilapidations is guaranteed.

When tenants slip into benefits by being unemployed or single parents when a "partner " leaves you also need to be aware that if the tenant lied about income or anything else significant the council can claim the benefits back!!!

Justin Selig - solicitor

8:27 AM, 22nd May 2013
About 8 years ago

Linda

Could you please send me your letter of engagement with the agent and their terms and conditions they supplied to you and we will have a look at this? My email address is justin@lawdepartment.co.uk

Thanks
Justin Selig

Mark Alexander

8:40 AM, 22nd May 2013
About 8 years ago

Hi Justin

Is this something you could possibly consider on a "CFA" Conditional Fee Agreement for Linda? i.e. "no win no fee".

From what I have read there appears to be strong evidence of negligence on the part of the agent together with quantifiable losses. Obviously I have not seen the submission to the Ombudsman or their summary findings, perhaps that paperwork would enable you to take a commercial view on running with the case on a CFA basis?

16:56 PM, 22nd May 2013
About 8 years ago

Estate agents are not and should be properly regulated. Successive governments have consistently declined to regulate agents. I am a solicitor. This profession is heavily regulated, indeed we have recently had an overhaul of our regulatory system which will costs the profession and ultimately clients of course probably over a hundred million in the work that it will require to implement it. Successive governments have insisted that lawyers require more regulation. If you buy house insurance the broker/insurer must be regulated. So, you buy a house, let your house and you may aswell be in the wild west. Does the public really think that it is o.k to suffer losses of thousands of pounds at the hands of agents but be protected when they spend £150 on an insurance policy? The current regime is toothless and the ombudsman lives in a world of fantasy if he thinks benefit tenants will be able to foot the bill for works let alone giving the impression that his function is to shelter agents and get them off the hook. If agents risked losing a licence if they did something wrong, without which they could not operate they would probably clean up their act. Agents who take illegal backhanders to arrange a sale to a "friendly buyer" which amounts to stealing from the owner should be in prison not reaping the harvest with impunity. Bad agents also hurt decent tenants and buyers. Good agents want regulation to separate them from the bad. It needs pressure on government to regulate estate agents without which nothing will change. Anyone with any interest in property, an owner would be owner or tenant should be telling the government that regulation must be introduced and if they do not commit to regulation with teeth they will vote for a party that will introduce it.

Mark Alexander

18:37 PM, 22nd May 2013
About 8 years ago

@Simon Rosser - regulation of Estate Agents is already on the statute books - see Estate Agents Act 1979. There is nothing yet for letting agents though, perhaps that's what you meant?

I believe regulation for Letting Agents coming though and compulsory Ombudsman registration will be required. The question I have is whether the Ombudsman will have the balls to strike of agents which act like the one described in the above post.

The compensation imposed on this Estate/Letting Agent is pathetic in relation to the damages but I suspect the only other option the Ombudsman had was to withdraw the Estate Agents membership. I believe the Ombudsman is only empowered to make very small awards? If expulsion had been the chosen option the Estate Agent would still be perfectly entitled to be a Letting Agent but not an Estate Agent for the purpose of selling properties. He may well be a good Estate Agent, just a crap letting agent. Further, the Ombudsman would no longer get any income from the agents membership fees so there's a conflict there too.

I agree that it's a mess but Wild west is Shelter talk akin to Rogue Landlords which is also very bad for public perception.

I stand by my initial recommendations to Linda to sue the agent for negligence. The evidence looks to be strong and the damages are easily quantifiable.

19:10 PM, 22nd May 2013
About 8 years ago

Mark, of course I am aware of the Estate Agents Act. However this is not regulation in the full sense of the word. It gives powers to prohibit persons from practising estate agency work rather like the Companies Act gives power to seek a prohibition order in relation to a person who has shown he is unfit to be a director. I seem to remember Robert Maxwell was subject to such an order. Mirror Group pensioners might have felt that it ultimately offered them scant protection when he walzed off with pension fund assets! Regulation needs to determine if a person is fit to practice estate agency and this includes letting. Any school leaver can set himself up as an estate agent and it is only in the extremely rare case that there is a prohibition order that he can be stopped. Estate agents should only be able to practice their profession (it is a dirty trade at the moment) if it has been established that they have a degree of competence and integrity and it must be possible to remove them from the register of licensed estate agents. There must be core standards established for agents and compliance must be audited and infringements punished. Agents deal with one of the most important things for people which is their home. Considerable sums of money are at stake. Most of us would consider the sort of money this thread is about to be material. How much more material is the purchase of probably the most expensive asset the average person will ever buy - a house. It is truly incredible that people's homes and their largest investment are run by utterly unqualified, unvetted, often inexperienced individuals many of whom are able to practice in a company with no assets to the detriment of any person who deals with them. I feel it is a quite staggering failure on the part of government that it is so.

Mark Alexander

19:23 PM, 22nd May 2013
About 8 years ago

@Simon Rosser - whilst we are both on our soap boxes (LOL) there is something which really bugs me about the Estate Agency Act 1979. It's that I can't find any evidence whatsoever of the act having ever been used to prosecute an Estate Agent for trading without being a member of a redress scheme. As a result there are thousands practising Estate Agency illegally, with no PI insurance, no redress scheme and so on. I've reported several of these to both Ombudsmen and also Trading Standards/OFT and nothing ever seems to be done. Do we need more regulation or do we need existing regulation to be effectively policed?

The same can be argued about Landlords. Councils will not use the laws they already have as it costs them money and they don't get the benefits. If they close down a street of Beds in Sheds they have to re-house the illegal immigrants which were occupying them at their own expense. If they prosecute the owner they get 0% of the proceeds of any fines. A thankless task for the Councils and with restrained budgets it's pretty obvious why they would prefer to invent a new landlord stealth tax in the form of licencing as opposed to upholding the existing laws. It's all a big game of politics I'm afraid, another case of passing the buck to landlords which the general public mistakenly believe to be corrupt and minted due to the likes of propaganda organisations masquerading themselves to be housing as Charities, 🙁

Ahh, I feel so much better for that little rant!!!

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