This week the Property Ombudsman issued its annual report for 2017 and although there’s good news with complaints resolved by the TPO down by 16%, overall, formal complaints were up by 3% on 2016 with two-thirds of those being attributable to Lettings Agents; not a great advert for the industry. We, of course, don’t consider ourselves to be within that poor service bracket and so we thought it was a worthy opportunity to give a recap to Landlords on what to consider when choosing a Letting Agent in order to avoid a distressing letting process:
- Member of a Property Address Scheme?
It is a legal requirement for a Letting Agent to be registered with a Property Redress Scheme such as the Property Ombudsman. If they cannot provide evidence of membership, you should seek one that does.
- Do they have Professional Indemnity Insurance?
All organisations should have PI Insurance which covers them against being sued. It’s not unreasonable to ask an agent to confirm they have this insurance or see their policy.
- What do you want the agent to do?
Most Lettings Agents offer three levels of service:
- Tenant-find means that the landlord will be undertaking the day-to-day management of the letting.
- Tenant find with rent collection means the agent will find the tenant and collect the rent but all other matters will be dealt with by the landlord.
- Full Management means the agent takes care of everything to do with the letting from start to finish and will only involve the landlord if something out of the ordinary needs their decision.
What you need to decide is how much involvement you want with your rental property? Managing the property yourself will certainly be more cost effective but do you have the time? Do you want phone calls when the boiler’s not firing up or the toilet’s overflowing? For new or less experienced landlords, full management is often the service level of choice for peace of mind. Always, remember to assess the cost of each level of service and check exactly what services are included. If you aren’t going to manage the property, you want to ensure that the agent you choose is going to carry out regular inspections to ensure your new tenants are looking after it.
- Check the Landlords Agreement
This is the contract you will sign for the Letting Agent to act on your behalf. If there are sections you do not understand, take advice before signing. Particular areas to pay attention to are:
- Commission on renewal: Some agents take a fee for renewing the tenancy agreement with the tenant, to tie them in for a fixed-term period again. Check if this is the case signing-up and if it’s reasonable.
- Void periods: The agent might charge a fee for managing the property when the property is vacant, which is reasonable if visits to the property are required or to arrange maintenance, however, the fee should be less than when a tenant is in situ.
- Estate Agency Fees: This clause protects the agent should the property be put up for sale and bought by the tenant – whether or not the Letting Agent acts as Estate Agent for the sale.
- Admin Fees: Some – not all – agents charge administration fees on top of the fixed Let Only fee or monthly Management fee to carry out additional duties. This could be for renewing a tenancy, arranging a rent increase, arranging an inventory; there is likely to be a list of ‘extras’ and charges within the Landlords Agreement. It is vital you check these thoroughly and are in agreement with them, prior to signing.
- Are they competent regarding current legislation?
There is various legislation that you are responsible for as a Landlord which your Letting Agent will carry out on your behalf. Carrying out appropriate Right to Rent checks, arranging an annual gas safety check and providing a certificate to your tenant, collecting the tenancy deposit and depositing it in Government Approved Tenancy Deposit Scheme within 30 days of the commencement of the tenancy; these are all compulsory and if not carried out appropriately could leave you, the Landlord, exposed to a court conviction and fine. Ensure that you are happy that the Letting Agent you instruct is knowledgeable and you are confident will act correctly on your behalf. If necessary, check what accreditation the Agency has – are they part of a professional body such as the National Landlords Association or do they have Arla or Property Management qualifications?
- Property Management
If you intend to choose an agent to manage your property, ensure they are competent (as discussed above) and find out what contingency plans they have in place if they cannot reach you to advise you of an issue. You may be on holiday and your tenant has a burst water pipe; your agent can’t really wait for you to get back to approve a plumber to attend. Most Lettings Agents have a discretionary figure which they include under the Property Management section in the Landlord’s Agreement which they are authorised to spend up to in an emergency. It’s usually around £250. Most agents stipulate that they will attempt to contact the Landlord first but as this is not always possible, contingency planning is reasonable. Be sure to check this emergency amount and that you are happy with it.
- Do your research
Thus far we’ve discussed technicalities but you also need to do some research to narrow down your selection. There are a few ways of researching the right agent for you:
- Get online: Search engines such as Rightmove and Zoopla are advanced these days; you can see Letting Agents’ profiles, you can see how many properties they’ve got on their books in the area of your rental and most importantly, you can see testimonials of what other Landlords think.
- Drive–by: Get out and about in the immediate area around your rental property. See how many boards there are of agents letting property in your area and target them first. If they are showing multiple potential tenants around a property then you can target those first.
- Word of mouth: Ask around friends, family; if you are renting out a property locally then someone might have a recommendation on who to approach… or who to avoid!
- Mean, median, mode
Get three valuations. This should give you a good idea of what the average rental price your property is likely to achieve. If all three agents seem as good as each other, perhaps the one which gave the middle rental valuation is the agent for you; the most balanced perhaps.
Obviously, we would love you to choose us. I hope I have demonstrated from the above our knowledge and experience when it comes to letting property. If you’re currently looking to market your rental property in Gloucester, Stroud, Forest of Dean or surrounding areas, we’d love to help. Call us today on 01452 310999, email us at gloucester@surepropertygroup.com or call into our offices in Worcester Street, Gloucester to see how we can assist you.
We look forward to hearing from you.
Best wishes,
Tom Smith
Director
Sure Sales & Lettings