Leaders’ managing director, Paul Weller, says:
“As the private rented sector grows, more people are using letting agents, unaware that there is no proper regulation governing them, and in particular over how they handle client money.
"Over the 28 years we have been in business, we have seen countless letting agents disappear with their clients’ rent and deposits, either by going bust or through blatant theft.”
Mr Weller points to a number of recently reported cases, including that of Robert Stagg which was reported on the industry news site Letting Agent Today.
Mr Stagg was sentenced earlier this month to two years in prison after apparently pocketing £140,000 worth of rents and deposits, which should have been paid to landlords or held in accordance with the Tenancy Deposit Protection Scheme.
Another agent, Sharon Price of Price Properties, owed over £90,000 to landlords, tenants and contractors when her business went under, according to Letting Agent Today.
She had not held client money separately, kept inadequate records and ran her business in a ‘chaotic and shambolic’ way, despite describing herself as a competent and professional estate agent. She was fined just £3,000 by magistrates earlier this month.
The most recent case is of Milton Keynes agent, Thomas and Company Rentals, the owners of which have disappeared owing thousands of pounds in rent and deposits, according to a report in the Milton Keynes Citizen.
Landlords have been trying to contact the company for weeks to trace their missing rent, but with no success. The case is currently being investigated by trading standard officers at Milton Keynes Council.
Mr Weller says:
“Under the current system, there was no legislation in place to prevent these individuals – and others like them - from acting as they have. Worse still, there is nothing to stop any of them re-entering the lettings industry and handling rents and deposits once again!
"These cases – just three among many that occur on a frequent basis - highlight the fundamental lack of controls on letting agents, which we want the public to be aware of so that they can take steps to protect themselves.”
Mr Weller’s advice to landlords and tenants is simple. You are only protected if you use an agent that is a member of a professional body such as ARLA, NAEA or RICS.
These organisations are self-regulating and ensure that clients’ money is held in separate, ring-fenced accounts and properly protected.
Mr Weller says:
“But it’s not only about money. Your chosen agent should also be experienced, knowledgeable and competent to let and manage property, with a thorough understanding of the complex legislation surrounding letting.
"They should also have an in-depth knowledge of the local letting market; a firm grip on what is happening in the property market generally; and the ability to look after the needs of a range of clients efficiently and professionally.
“Unfortunately, getting it wrong can have dire consequences for landlords, including huge legal expenses, loss of rent, financial penalties and even custodial sentences for not complying with legislation.
"For tenants it can literally be a matter of life and death if legislation regarding the safety of the property and its contents is not complied with, for example gas, electrical and fire safety regulations.
“When you consider the many potential risks to the public, it is shocking that any person or organisation can become a letting agent, with no training, qualifications or financial probity.
"Until there is proper regulation in place, unprofessional, unqualified and unethical agents will continue operate to the detriment of unwitting landlords and tenants. This is particularly worrying at a time when more and more people are turning to the private rented sector for their housing needs.”
