Are you getting your money’s worth from your letting agent?
If you’re using a letting agent for property management, you’re in good company – about 61% of landlords are in the same boat according to the NLA. After all, outsourcing to a qualified professional is a no brainer when there are over 400 rules and regulations for letting a property, and fines for noncompliance go up to £30,000.
But when you are paying 8-15% of your rental income – up to 26% in London, on a property management service, you want to be sure you’re getting the best service possible and you’re getting all the benefits you’re paying for. Below are the main things that define what a good property management service looks like. How many of these boxes does your current letting agent tick?
No hidden fees or secret clauses in your contract
Many landlords discover they’ll pay more than they thought when they receive a surprise bill – for something they never realised was chargeable. Among the extra costs and clauses you may find hidden in the small print are:
- a ‘Tenancy Renewal Fee’ – you will be charged every time your tenant extends the tenancy beyond the initial fixed-term.
- admin charges when new tenants go in
- charges for tenancy agreements, telephone calls abroad, etc; while they might be normal, make sure you know what they are and you are happy with them
- clauses that state a very long notice period of 6 months or more if you wish to cancel the agreement
- estate agency fees clause – the agent will get a fee if the property is put up for sale and is bought by the tenant, even if the letting agent didn’t act as an estate agent for the sale
As a general rule, a good agent will have a clearly written contract and a clear pricing structure, with each cost broken down. Read your contract carefully and talk to a specialist if there is anything you don’t understand. If there’s a particular clause in your contract you’re unsure about, we’re happy to offer a professional opinion, give us a call on 0330 043 0183.
You receive thorough reports after each inspection
What’s in a good inspection report?
Are you receiving regular inspection reports from your agent or do you have to chase them up?
Because of the 2015 retaliatory eviction legislation (part of The Deregulation Act), it’s crucial to establish the exact condition of your property at regular intervals. After each inspection, you should receive a report that includes good quality photographs of all the areas inspected – so you can compare the current state of the property with the initial inventory.
The level of detail you get in an inspection will also tell you a lot about the quality of your agent. Beyond visible issues such as carpet cleanliness or furniture damage, does your agent pay attention to areas which could lead to costly repairs if action isn’t taken in time? Are kitchen worktops and baths sealed properly and is there water leaking under the sink?
How often should your agent do inspections?
Regular inspections are the only way to identify early problems such as leaks, unauthorised alterations, messy tenants or even illegal activities. Inspections should happen routinely, every quarter or at least every 6 months as an absolute minimum.
Overworked and understaffed agents try to cut corners wherever they can, and inspections are the first things to get skipped. In the most serious cases, the landlord finds out about a problem with their property once it becomes huge – police coming to dismantle a cannabis farm or a boiler exploding. In more common cases, disgruntled tenants will just leave at the end of a tenancy. When the landlord asks the lettings agent why the problems were never reported or resolved after inspections, it transpires the ‘promised regular inspections’ never happened.
No surprise charges for repairs
Are you crystal clear on what the agency has to run by you and what they’re just expected to do? Many agents will carry out emergency repairs without checking with you first, and if they work with their own repairs contractors -and receive commission from the repairer as a percentage of the repair cost, you might end up paying hundreds of pounds for something as minor as a light bulb change.
Set a limit for emergency repairs
Try to agree with your agent on a spending limit for emergency repairs they are allowed to do without notifying you – £200 or £300 is a reasonable amount, and make sure you are notified about all other repairs. Ideally, the agency should present you with a choice of contractors and allow you to choose the one you’re comfortable with, or they should be able to work directly with your preferred contractors if you give their contact details to the agent in advance.
Don’t settle for 1 price quote
Many landlords end up overpaying for a repair because they don’t have the contacts or the knowledge of how much the repair should cost. If you’re in that category and the agency pushes you to work with their preferred contractor, do a quick online search for prices in the area before you commit to the repair.
Your agent is always available
What are your agents’ opening hours? Are they open on weekends? Are they only 9 to 5 during the week?
Most people work during the day – longer hours nowadays, so usually enquiries are made during the weekend and after work hours. If your agent misses them, there’s a good chance the tenant would have found somewhere else by the time their call is returned. Broken boilers have a nasty habit of happening unexpectedly, often on weekends and during night time, so it’s important that your agent picks up and acts quickly, no matter what the hour.
How long does it take your agent to answer a query? People expect to hear from an agent almost immediately, often within an hour, but definitely within 24 hours. If it takes your agent long to answer, that should raise an alarm about their general service.
Your agent is fully regulated and in a professional body
Anyone can set up as a letting agent, without any qualifications or experience, and many landlords working with such ‘cowboy agents’ end up suffering. For an agent that knows what they’re doing and will keep you on the right side of the law, choose a member of the National Approved Letting Scheme, or one of the professional bodies that support it:
– The Association of Residential Letting Agents (ARLA)
– The Royal Institution of Chartered Surveyors (RICS)
– The National Association of Estate Agents (NAEA).
All letting agents are required by law to be a member of one of three government-approved letting agency redress schemes. If they aren’t a member of at least one, they are operating illegally and could face prosecution The schemes are: Ombudsman Services Property, Property Redress Scheme and the The Property Ombudsman.
Also remember to check if your agent has client money protection in place. Sounds like a bad movie plot, but there have been instances where agents have ran off with tenancy deposits and rents. Without client money protection the landlord was left to repay the tenants, and couldn’t ask the tenants to pay rent again. A professional lettings agent should also have professional indemnity insurance which will cover them against the chance of being sued.
Switching letting agents isn’t as hard as you think
According to the PRS, property management issues were the most common reason for complaints received from landlords about their agents in 2017. Late payment of rent, bad repairs management, lack of communication, deterioration of the property, rude staff and long void periods between tenancies are all depressingly common.
Even when they are unhappy with their current agent, many landlords hesitate to make the switch. Some don’t want to deal with the hassle, while others don’t even realise that changing letting agents is a possibility.
Contrary to popular belief, you don’t have to wait until the end of a tenancy to change letting agents. The Tenancy Agreement is a contract between you and your renter, with the agent working on your behalf, so changing agent does not affect the legal rights or obligations of either party.
Tenants are usually the most affected by a defective property management, so it is likely they will be happy to see it replaced, and may even stay in the property for longer than they would have with the previous agent.
At Howsy, we have a lot of experience taking over property management, and our process is completely smooth and totally free for both landlord and renter. We’ll work with your current letting agent to manage every aspect of the transfer, from agreements to deposits to liaising with the renters. If you’re unsure about your contractual obligations with your current agent, we also offer a free legal helpline.
If your current agent doesn’t exactly tick all the boxes and you’re looking for a better solution, give us a shout over at Howsy. We’re a friendly bunch and we’re happy to share experience and advice anytime. Call us on 0330 043 0183.