Here is a question to the blog clinic from Arthur (not his real name) on behalf of his sons who are landlords:

A property my two sons own is let out by a letting agency, as they do not live permanently in the same city as the let out property. On a recent visit by my sons to the property accompanied by a representative of the letting agency, it became apparent that there had been substantial long term damage to contents and the property itself.

The last recorded visit to the property was on in the previous month. My sons were not advised of any damage to contents or buildings as a result of that visit.The estimated damage caused is in the region of £7-£8K, however the tenant has given notice that they are leaving in 2 months time and the deposit is one months rental of £550 only.

In the agreement between my 2 sons and the letting agency is a clause that the property is to be inspected every 3 months and a report produced. To date no such reports have every been forwarded to my sons even upon request and they have never been made aware of any damage to the house contents or the building itself.

I would be obliged if you could advise if the letting agency is liable to make good the difference between the value of the deposit (£550) and the estimated repair bills of £7-£8K.

Answer

It sounds to me as if the agents are definitely in breach of their agreement – as they have failed to report the damage to the property. Which is certainly something your sons needed to know – and indeed the whole point of inspections is to check up on this sort of thing.

However – does this make the agents liable for the cost of the repair work (over and above that covered by the deposit)?

I think that if this were to go to court the agents would be liable for something but probably not the whole loss. It is after all not the agents themselves who caused the damage – it is the tenants. The issue with the agents was the failure to keep your sons informed so they could do something about the situation.

Issues re compensation

The loss caused by the agents’ breach of contract will be the difference between the loss suffered now and the probable reduced loss if they had done what they were supposed to do. So you would need to find out what they have done. For example, have they spoken to the tenants about the damage, and followed this up with letters?

Once tenants are in occupation there is not a lot you can do to force them to change their behaviour. With uncooperative tenants, often the only thing you can do is to evict them – but these tenants are leaving anyway. So for example if the tenants have been in occupation for several years and the damage would have been reduced if the landlords had known about this and evicted the tenants after, say, the first six months, then you could justify a claim against the agents for any damage done to the property after that.

However if these tenants are leaving at the end of their first six months, and the agents have spoken to them about the damage and they have ignored this, then it is difficult to see how your sons could have done anything different. So although I think the agents are in breach of contract and if your sons were to bring a claim against them they should succeed and receive some financial compensation – the amount of compensation they would get would depend on the circumstances.

Other options

Your sons should also consider looking to see if the agents belong to any organisations such as ARLA of NALS or one of the Ombudsman schemes and if so consider bringing a complaint.

Note that ALL agents and property managers must belong to a Property Redress Scheme from 1 October and this is the sort of situation where a complaint might well be made.

Click here to read original article ‘Agents failed to inform landlords of property damage – are they liable for the loss?’