Choosing a letting agent
Deciding which letting agent to use is one of the biggest decisions a landlord can make. After all, there are no easy answers. You will be trusting them to look after a valuable asset that could be funding your future retirement. Not something you want to risk!
There are many factors to take into account when choosing an agent. Do you want an online agent or the personal contact from a more traditional high street agent, a business that adopts an innovative new approach or one with a long track record of success in the local area?
Do you prefer word of mouth recommendations, high scores on a customer review website or do you simply go with your gut instinct?
Whichever approach you adopt, we would recommend you follow these three simple steps before signing on the dotted line and entering into a contract. Taking a few minutes to carry out these checks could save you a lot of money and heartache in the long run.
Step 1: Redress scheme membership
It is a requirement for all letting agents and property managers in England to belong to a government approved property redress scheme.
What does this mean in practice? It means that if any complaints cannot be resolved by the agent, there is a mechanism for your complaint to be investigated by an independent person. If they find in your favour, the agent can be required to pay compensation.
There are two government approved redress schemes (as of August 2018):
So the first thing to do is make sure the agent belongs to one of these schemes. By law, agents must display this information on their website and in their business premises. It should be clearly displayed for everyone to see.
If a redress scheme sign is displayed, we would still recommend a further check. It will only take a minute or two. Visit the redress scheme website, enter the business name or postcode and check that they are listed. After all, it is all to easy to obtain a logo from the internet or display an old sign after membership has lapsed.
Step 2: Display landlord and tenant fees
It is a requirement for all letting agents and property managers in England and Wales to display their landlord and tenant fees.
By law, agents must display their fees on their website and in their business premises. It should be clearly displayed for everyone to see.
Checking this information is important. After all, you want to make sure the fees are fair and reasonable and that you won’t get stung with unexpected costs further down the line.
Step 3: Client money protection
Many landlords don’t realise the importance of Client Money Protection (CMP) schemes and so rarely ask letting agents if they belong to one.
Why is this important? Imagine that the letting agent or one of their employees steals the cash or uses it fraudulently – unfortunately, it is not quite as rare as you might think.
This is where CMP comes in. If the agent is a member of a CMP scheme, any money owing to the landlord is protected through an insurance-backed scheme. Without it, the landlord could be left considerably out of pocket and with added responsibility for reimbursing any tenancy deposits that had not been properly protected.
While it is not a requirement to belong to a CMP scheme, all letting agents in England must clearly display whether or not they belong to one.
You can visit the SAFEagent website to find a list of letting agents that belong to a CMP scheme. It includes schemes operated by ARLA, the Law Society, NALS, RICS and UKALA.
Once you visit the SAFEagent website, you can enter your postcode to search for agents in your local area. SAFEagent is a nationally recognised kite-mark that is mentioned in the government’s ‘How to Rent’ booklet. You can find out more about SAFEagent in our Landlord Suppliers Directory.
There are also other client money protection schemes that you may come across. We don’t have space to list them all. The main issue is to make sure your letting agent belongs to one of them and verify the information.
By following this simple three step approach, we hope that your search for a letting agent will become a slightly less painful experience. You can also decide whether you want the peace of mind that comes with client money protection, to help safeguard your property investment.
What can I do if an agent is breaking the law?
Failure to belong to a redress scheme or to display the required information is an offence that can result in a £5,000 civil penalty. The rules are enforced by local councils – usually Trading Standards but sometimes the Private Sector Housing Team.
If you come across an agent that is breaking the law, you can report it to your local council and you can find their details here.