A good friend rang me this week asking for advice on renting out her house in the South of England, the only advice I gave her was don’t sign any contract and to send over the paperwork from the local agent so I could take a look and advise further before she instructed the agent.
Within 12 hours I had a call explaining that the local agent had been around and he was really nice! He took photographs, the house was now on Rightmove and she had also signed the contract…….
I started to read the contract she had signed and asked her series of questions – The agent had reassured her that it would be easy to back out of the contract as there was a cooling off period. (Technically this is correct if you sign the agency contract at your property and not at the agent’s office, however beware of the waiver that some agents will try and get you to sign overriding this 14 day cooling off period).
On the first page of the contract there was a clause that stated the landlord would have to pay the agent £120 if the property was advertised and the landlord decided to withdraw the property from the market – So straight away she had spent on £120 just to get her property seen on Rightmove.
Property redress scheme
As the agent seemed so “nice” I decided to do some checks myself, so the first thing I did was to see if they were a member of a property redress scheme as they would be breaking the law if they had not registered, this is simple to check by just logging onto https://www.tpos.co.uk/find-a-member
How to check for a licensed agent..
The next thing I did was to check if they were a licensed letting agent http://www.arla.co.uk/find-agent
Using an ARLA (Association of Residential letting Agents) agent means you have client money protection, to put this simply if the agent suddenly goes out of business and is holding your rent or deposit then ARLA will repay you any shortfall.
ARLA carry out regular inspections on agent’s client accounts and banking procedures to ensure full compliance, plus to become a member of ARLA, the letting agent or a member of their staff will have had to take and pass a lettings 4 part technical exam.
The inventory
I was also concerned at the very low landlord set up fee being offered as it stated that the inventory was included in the price, in my opinion the Inventory is probably the most important document involved in a let, It turns out that the report would be compiled by an administrator that is employed by the agency – Unless the agent employs a fully trained inventory clerk I am always concerned at the quality of in-house inventories and the standard mistake of not having dated photographs, make no mistake it can be a mammoth task compiling a quality inventory and I would always advise using a third party inventory clerk, plus when submitting a claim to the adjudicator at the end of a tenancy they are viewed as genuinely independent unlike an in-house clerk which has to be biased towards their client – The landlord, which forces the adjudicator to look out for the tenant.
As they were not members of ARLA and only operate from a single office this always makes me question the quality of the actual tenancy document, as an ARLA member you can either buy a tenancy off the shelf or they will advise you of the validity of your own contract, and the corporate agents will spend tens of thousands with their solicitors to ensure their contracts are upto date and valid. How will you know if a non-ARLA agent tenancy complies? This quickly becomes clear when you’re stood in front of a judge trying to secure an eviction.
Fees
Very often landlords will try to negotiate really hard to reduce the management fee by 1% because another agent has a deal on! Do not get hung up on what sometimes can amount to £6 a month when deep in the contract are fees charging you for renewals, annual tax statements, registering your deposit fee, copy statement fee, serving notice fee, introduction to tenants sales fee.
If you are not happy with any of the terms then tell your agent to exclude them before you’re willing to sign, every agent needs more properties to rent as demand from tenants is high. If you are lucky and you get a great tenant then you never need to worry about these things but be aware that tenants are getting smarter, it is only when things start to go wrong that we refer back to agency contracts or Tenancy documents – So my advice is to ask all the difficult questions before you sign on the dotted line.