As someone who has dealt with letting agents for many years as a lawyer and property investor – and in the past as a tenant – the question “What makes a good letting agent”? is one I have contemplated on numerous occasions.
First thing to say is that a landlord’s view of a good letting agent may not be the same as a tenant’s.
1. Good for landlord and good for tenant
Ideally a letting agent should be equally good for landlords and tenants. Typically they act for landlords but they need the custom of tenants to fulfil their duties to landlords.
They need to provide a great service to both, but in the real world there is often a conflict between the interests of landlords and the interests of tenants.
Agents, being piggy-in-the-middle, can sometimes find themselves in a no-win situation.
THIS BLOG LOOKS AT THINGS FROM THE PERSPECTIVE OF THE LANDLORD.
However, it is a blog equally useful for tenants – offering them a valuable insight into the relationship between landlords and agents.
2. Selecting the agent
If you own a property and want to let it out, what should you look for when selecting a letting agent?
A great way to start is to see if you can find an agent who comes highly recommended by someone you know and trust who has actually used the agent and received good service.
In the absence of a recommendation, you should carry out a thorough due diligence assessment of any agent you are thinking of engaging – relying on the internet and all other available sources of information.
3. Qualifications, knowledge, experience and expertise
The first thing to consider is the professional qualification of the agent and whether they are signed up with a redress scheme – such as the Property Redress Scheme or the Property Ombudsman.
Surprisingly, letting agents in England & Wales don’t need to have a specific qualification to practice.
Although qualifications are not necessarily proof of competence, performance or quality, they are clear evidence of a certain level of knowledge and ability. All things being equal, it makes sense to favour an agent with relevant professional qualifications over one without.
During the meeting or telephone call in which you assess whether or not to engage an agent, you want to try and establish their knowledge, experience and expertise.
Are they friendly, helpful and affable? Do they seem like people both you and your tenants are going to be able to deal with easily?
50 Ways To Put Together A Deposit in 6 Months
4. Consider the business status of the agent
Check the business set-up of the agent you are dealing with. Are you dealing with an individual, a partnership or a limited company?
Limited companies have limited liability and may be more difficult to sue or recover money from in the event of a dispute or issue.
That may not be a concern with a long established agent. However, if the agent is a newly set up company that may present greater risk.
5. Insurance protection and complaints procedure
You should always check if the agent has indemnity insurance – giving you protection in the event of having to sue the agent for negligence or breach of contract. It is remarkable how few landlords check this key point and it is best practice to always do so.
Also look to see if the agent has an internal complaints procedure which you can use before having to rely on any external redress scheme or court proceedings.
FURTHER, YOU SHOULD CHECK TO SEE WHETHER RENTS WILL BE KEPT IN A SEPARATE CLIENT ACCOUNT – AND WILL NOT BE MIXED WITH THE AGENT’S OWN MONEY.
6. Know your contract with the agent
Be sure that you know the exact nature of the agreement you sign.
Will it be a “let only” agreement and what exactly does it include? Does it include:
- Preparing the tenancy agreement?
- Obtaining references?
- Tenant check-in?
- Check-in inventory and photographs?
- Check-in meter readings?
What will the agent do in terms of protecting the tenant’s deposit? Will they be wanting to protect the deposit or will they be expecting you to do so? If they deal with the protection, will there be a charge to you, and who will deal with deposit matters at the end of the tenancy?
Finally, find out what will happen at the end of the tenancy in terms of the check-out of the tenant. Will the agent deal with the check-out (if so, at what cost?) or will it be something for you to do?
If you opt for a “management” agreement, read the agreement with care to see what is covered under the term “management.” What will the agent do, how, when and at what cost?
Usually the agent will collect the rent, and that is obviously a key matter. You will want to know when rent will be paid into your account and the precise deductions which may apply – when and how.
Check what will happen if the rent is late.
What are the arrangements for serving a notice seeking possession? What will happen if court proceedings are necessary? What charges are likely and how will they be applied? A full, careful reading of the management agreement should deal with these and many other fundamental considerations.
TO ACCESS MY ARCHIVES OF ESSENTIAL PROPERTY BLOGS FOR PROPERTY INVESTORS PLEASE SUBSCRIBE HERE
7. Key contractual matters to look out for
Check how the management agreement deals with, and charges for, the following key matters :
- Preparing the tenancy agreement
- Obtaining references
- Rent protection insurance
- Protection of the deposit
- Check-in and meter readings
- Check-in inventory
- Regular visits to the property/inspections
- Gas safety check
- Electrical Installation Condition Report (EICR)
- Energy Performance Certificate (EPC)
- Legionella Risk Assessment Report
- Dealing with unpaid rent or other breach of tenancy
- Preparation and service of notice seeking possession
- Commencement of court proceedings
- Tenancy Renewal.
8. Be clear on fees and charges
A COMMON CAUSE FOR DISPUTE BETWEEN LETTING AGENTS AND LANDLORDS IS OF COURSE FEES.
Typically the fee of an agent will be a percentage of the rent plus VAT – if the agent is VAT registered.
With a let only agreement, a charge of 8-10% of rent is fairly typical; with a management agreement the norm is around 10-15% of rent.
Clearly you will want to negotiate the lowest percentage possible. However, watch out for extra or hidden charges.
To compare the fees of two agents, you cannot just look at the headline percentage. It doesn’t necessarily follow that the agent charging the lowest percentage is the cheapest. You need to carefully consider the actual tasks to be carried out under the agreement.
Finding a good agent is not always easy. There are some truly awful ones out there earning the title “rogue agents”.
If you carry out the steps suggested above, you should avoid the cowboys and find good quality agents able to provide you with a high-class, professional service.
Have you had good or bad experiences with letting agents? Do you wish to share? Other readers may be able to learn from your story. Please leave your comments below.
Rebel Property Coach
Please follow me on Twitter @Dalton1London
Please link up with me at LinkedIn.
My website is: www.rebelpropertycoach.com
Categories: 07 Next level