Using a letting or managing agent can make running a rental property easier.
An agent may advertise the property, reference tenants, collect rent, protect deposits, arrange repairs, organise safety checks and deal with day-to-day communication.
But appointing an agent does not mean every legal responsibility automatically moves away from the landlord.
Landlords can use agents to carry out many duties on their behalf, but they should still make sure those duties are actually being completed.
Start with the management agreement
The first document landlords should review is the agreement with the agent.
It should make clear which services the agent is responsible for.
That might include:
- advertising and tenant selection;
- tenancy documentation;
- deposit protection;
- rent collection;
- inspections;
- gas and electrical safety;
- repairs and maintenance;
- rent increases;
- possession notices; and
- dealing with tenant complaints.
Avoid assumptions.
If something is not clearly included in the agreement, establish who is responsible for it.
The landlord still owns the compliance risk
In England, landlords have continuing duties relating to matters such as:
- property safety;
- repairs;
- gas and electrical safety;
- energy performance;
- tenancy deposits;
- Right to Rent checks;
- licensing;
- tenancy information; and
- the requirements introduced by the Renters’ Rights Act.
An agent can perform many of these tasks, but the landlord should not simply stop checking.
The Renters’ Rights enforcement regime also recognises that people acting on behalf of landlords can themselves be liable for certain breaches.
That does not mean the landlord can safely ignore what the agent is doing.
Ask for evidence, not reassurance
A landlord should be able to see evidence that important compliance tasks have been completed.
For example, keep copies of:
- gas safety records;
- electrical inspection reports;
- EPCs;
- deposit-protection certificates;
- prescribed information;
- tenancy agreements;
- Renters’ Rights information;
- licences;
- inspection reports; and
- notices served on tenants.
“Don’t worry, we deal with all that” is not a compliance record.
Check deposit handling carefully
If an agent receives the tenancy deposit, landlords should know:
- which deposit scheme is being used;
- when the deposit was protected;
- whether the required information was supplied;
- who keeps the evidence; and
- what happens when the tenancy ends.
The same principle applies to rent and other money held by the agent.
Where an English letting or property-management agent holds client money, the agent must normally belong to an approved Client Money Protection scheme.
Landlords can ask which scheme the agent belongs to and check that the membership remains current.
Is the agent in a redress scheme?
Letting agents and property managers operating in England must belong to an approved redress scheme.
This provides a route for unresolved complaints about the agent’s service.
Landlords should know which scheme their agent belongs to and keep that information with the management agreement.
Audit advertising and tenant selection
The agent may prepare the advertisement, but landlords should still understand what is being published on their behalf.
Check that advertising does not contain inappropriate blanket restrictions such as:
- “No DSS”;
- “No benefits”; or
- “No children”.
Also check that applicant-selection and affordability procedures reflect the current rules.
An old instruction given to an agent several years ago may no longer be suitable.
Repairs cannot disappear into the system
One of the biggest risks of outsourced management is assuming that reported repairs are being dealt with.
Ask how the agent records:
- tenant complaints;
- repair requests;
- contractor instructions;
- access attempts;
- completed work; and
- follow-up inspections.
Serious issues such as damp, mould, electrical problems or gas safety should have a clear audit trail.
Landlords should also agree how much an agent can spend on repairs without additional authority.
Safety certificates need monitoring
Landlords should know when each important certificate expires.
Do not leave renewal dates solely inside an agent’s software system.
Maintain your own simple schedule showing:
- gas safety dates;
- electrical inspection dates;
- EPC expiry;
- licence renewal dates; and
- any other recurring compliance deadlines.
That gives landlords an independent way to spot something that may have been missed.
What happens if you change agents?
Changing managing agent can expose gaps in property records.
Before the outgoing agent closes the file, landlords should obtain copies of:
- tenancy documents;
- tenant contact details;
- deposit information;
- rent statements;
- inventories;
- inspection records;
- safety certificates;
- repair history; and
- correspondence about disputes or notices.
Responsibility for deposits and tenant communication should also be clearly transferred.
How does the position differ elsewhere in the UK?
The principle that landlords should understand what their agent is doing applies throughout the UK, but the regulatory systems differ.
Wales has separate licensing requirements through Rent Smart Wales for landlords and agents carrying out letting or management activities.
Scotland requires letting agents carrying out relevant work to be registered and comply with the Scottish Letting Agent Code of Practice.
Northern Ireland has its own private-tenancy framework and landlord registration requirements.
Landlords with properties across several jurisdictions should therefore check both landlord and agent requirements separately.
Manage the agent as well as the property
A good letting agent can be extremely valuable.
But outsourcing the work should not mean outsourcing all oversight.
Landlords should periodically ask:
- What is the agent responsible for?
- What am I still responsible for?
- Can I see evidence that each compliance task has been completed?
- Are certificates and licences current?
- Are the agent’s procedures based on the latest law?
- Could I produce the property file if the agent disappeared tomorrow?
If those questions cannot be answered easily, the management arrangement needs reviewing.
NetRent’s Landlord Legal Updates will continue to explain important legal and regulatory issues affecting landlords, letting agents and tenants across the UK.
NetRent also supports landlords with landlord insurance, mortgages and property sales.
Telephone: 01352 721300
Email: support@netrent.co.uk
Important information
NetRent does not provide legal advice. The articles represent our understanding of rental property law and are for general information only.