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Although the landlord is deemed to be the client, a letting agent has responsibilities to the tenant too.

Although the landlord is deemed to be the client, a letting agent has responsibilities to the tenant too.

Although a letting agent must always act in the best interests of the client landlord who is, after all, the person who is paying for the services of the agent, it is important to remember that they have to also have regard to the best interests of the tenants as well. Sometimes there is a fine line to be drawn and it is suggested that if an agency has a dilemma in this regard that appropriate advice is taken, particularly if the matter concerns the health and safety of the tenant.

The key to running an effective agency in terms of dealing with duty of care to tenants is effective communication with the tenants, landlords, contractors and any other third parties. It is also important to ensure that all staff are adequately trained to competently deal with any situations that may arise. It may be helpful to know that the experience of many agents is that once they have been operating for two years 95% of everything that is going to happen will have happened. From there on it all repeats itself. This means that once proficient systems are in place to deal with the various issues they will just keep repeating themselves, the agency and the staff will continue to grow in confidence and, hopefully, so will the profits.

From 1st October 2014 it has been a legal requirement for letting and managing agents in England to belong to a government approved property redress scheme. Failure to do so may result in a fine.The new law grants both landlords and tenants the right to independent redress if their agent cannot resolve a complaint to their satisfaction. This means that anyone who feels they get a poor deal from their letting agent will be able to take their complaint to a redress scheme.

There are always two contracts when a letting agency is instructed and the tenant takes the property. Firstly, the tenancy agreement (almost exclusively an assured shorthold tenancy, ‘AST’) which will be between the landlord and the tenant, even if drawn up and signed by the agency. Secondly, the ‘business contract’, which will be between the agency and the landlord, the terms of business.

There are always two contracts when a letting agency is instructed and the tenant takes the property. Firstly, the tenancy agreement (almost exclusively an Assured Shorthold Tenancy, ‘AST’) which will be between the landlord and the tenant, even if drawn up and signed by the agency. Secondly, the ‘business contract’, which will be between the agency and the landlord, the terms of business.

Under agency law, the core primary duty of any agent is to the person who instructs him. In the case of a letting agent this will be the client landlord. An agency is under both a common law and a contractual duty to act in the best interests of a landlord at all times. The common law duty of agency law has evolved over time through case law. Acting in the best interests of a landlord is not always easy. Sometimes an agent will have to give a landlord advice that they do not want to hear. For example, if a tenant stops paying rent and the landlord wants the tenant to leave quickly the member of staff dealing with the particular landlord will have to explain that the correct legal process must be followed. This could involve a court order for possession and possibly bailiff attendance at the property. All of this takes time, usually several months. Perhaps the landlord will understandably become irritated and frustrated by this. He is not receiving rent. He is worried that the property may be damaged. The duty of an agency in such a scenario is to warn the landlord that he must not take any action that may leave him open to a charge of harassment or disturbing the quiet enjoyment of the tenant. He should be particularly informed of the serious consequences of falling foul of the rules on illegal eviction. All of this will need tact, sensitivity, diplomacy and a certain amount of firmness to ensure that a landlord does not take any action that could seriously compromise his position.

As well as the common law of agency the landlord will have a duty under contract law to the landlord. In many ways this will be easier to ascertain because the terms will be clearly laid out in the contract. Although it is not unknown for an agency to be instructed verbally (which is quite legal and still forms a contract) this is not advisable because of latter problems that may occur in terms of what was agreed at the time. If there is a dispute between a landlord and an agent it can hopefully be resolved amicably by both parties examining the relevant term in the contract.

Tenants are also customers of the letting agency and the agency has a duty of care towards them. That duty begins the second a potential tenant walks in the door of the agency or a member of staff picks up the phone to an interested party. It could even be argued that this duty could be extended to include placing an advertisement for a property either online or through other sources.

Tenants are also customers of the letting agency and the agency has a duty of care towards them. That duty begins the second a potential tenant walks in the door of the agency or a member of staff picks up the phone to an interested party. It could even be argued that this duty could be extended to include placing an advertisement for a property either online or through other sources. In the example of an angry landlord wanting to take unilateral action against a non-paying tenant by, for example, changing the locks, the agency has a duty of care to the tenant as well as a duty of loyalty to the landlord. By preventing the landlord from potentially breaking the law the agent is fulfilling his duty to both parties.

It must be understood that a tenant walking into a letting agency office is deemed to be a customer covered by consumer law in the same way that any other customer and consumer would be covered walking into any other High Street premises providing products or services. However, the letting agent is the representative of the landlord. Strictly speaking, all of the relevant legal obligations of any contractual terms flow between the landlord and the tenant. Several books on agency and contract law refer to the agent as being like a glass screen between both parties. Unless the agency has in some way either been negligent as regards looking after the tenant or breached the contract with the landlord, all of the legal issues will be between the landlord and the tenant. If the tenant is, for example, sued by the landlord for non-payment of rent and the matter comes before the county court in front of a district judge, the case will be Mrs Jones (landlord) v Mr Smith (tenant). The agency may not be a party to the proceedings although the relevant member of staff may be called as a witness. The matter before the court will be between the landlord and the tenant.

It is important for an agent to ensure that the legal rights of prospective tenants are not infringed. This means that all terms, any fees, charges and conditions are clearly explained. The properties advertised for let must be accurately described and the relevant documentation such as the energy performance certificate, gas safety record, inventory, tenancy deposit information and the electrical safety certificate must be provided as appropriate. An agent must have regard to the requirements of a tenant in terms of length of contract.

It is important for an agent to ensure that the legal rights of prospective tenants are not infringed. This means that all terms, fees, charges and conditions are clearly explained. The properties advertised for let must be accurately described and the relevant documentation such as the energy performance certificate, gas safety record, inventory, tenancy deposit information and the electrical safety certificate must be provided, as appropriate. An agent must have regard to the requirements of a tenant in terms of length of contract.

It is usually common practice to take a holding deposit if the tenant expresses an interest in taking the property. The terms for taking the holding deposit should be clearly explained and if the position of the agency is that the holding deposit may nor be refunded should the tenant either withdraw or fail right to rent checks, then this should be clearly explained to the prospective tenant before the holding deposit is accepted. An important note regarding holding deposits is that the receipt and any other relevant paperwork should state that the holding deposit is NOT a deposit for purposes of the Tenancy Deposit Scheme legislation, but that it may transfer to become part of this security deposit, and therefore the legislation, should the tenancy go ahead. There have been a few cases where a tenant has attempted to claim three times the fee by claiming that the “holding deposit” needed protecting. In England the tenants agreement is needed to transfer the holding deposit to the tenancy deposit or rent.

A letting agency is also under an implied term to act with due diligence and reasonable care and skill under the terms of the Supply of Goods and Services Act 1982. This legislation covers any goods supplied or services provided to a consumer from a professional organisation or business to a customer. In addition all charges must be reasonable and commensurate with the services provided.

With regard to tenants a letting agent is also bound by the unfair terms rules in the Consumer Rights Act 2015. Although technically speaking the strict legal relationship is between the landlord and the tenant with the agency facilitating the process in terms of the whole process, the parts of the arrangement where the tenant agrees to the business terms of the agency, will be between the letting agent and the tenant. All terms must be in plain and intelligible language, not disadvantage the consumer and ensure that the customer is not put at a disadvantage. This will not apply to individually negotiated terms.

Agents are under a duty to both landlords and tenants to act promptly, appropriately and effectively with any and all maintenance issues that may occur during the life of the tenancy. Within the lettings industry the majority of maintenance issues concern water. Problems with baths, showers, taps, sink blockages, difficulties with toilets, leaks from an upstairs flat in leasehold properties are all very common issues that need to be addressed. It is important that in dealing with such challenges that the agency keeps both the landlord and the tenants updated on the situation.

Agents are under a duty to both landlords and tenants to act promptly, appropriately and effectively with any and all maintenance issues that may occur during the life of the tenancy. Within the lettings industry the majority of maintenance issues concern water. Problems with baths, showers, taps, sink blockages, difficulties with toilets, leaks from an upstairs flat in leasehold properties are all very common issues that need to be addressed. It is important that in dealing with such challenges that the agency keeps both the landlord and the tenants updated on the situation. If, for example, there is a boiler repair issue and the gas engineer informs the agency that it will take two days to get a part and that the unit cannot be fixed until then, it is important that both the landlord and the tenants are kept informed of exactly what is going on. By keeping all concerned honestly appraised of exactly what is going on the agency will help to mitigate possible frustration for the tenants. There is nothing worse than allowing a situation to develop where an angry tenant has to ring an agency to complain that they are now in now second day without heating and nobody has returned the previous call. Part of an agent’s duty to a tenant is to respond quickly to all email enquiries and phone calls even if the response is that they will unfortunately have to be inconvenienced for another day until the problem is resolved. It is better to ‘over communicate’ than to ‘under communicate’ even when the news is not what the tenants or the landlord want to hear. In addition it will give a bad impression of the agency if calls or queries are not dealt with swiftly. It is better in terms of good customer relations, to call promptly about an issue that has not been resolved than to call back 6 hours later with a complete solution. Tenants do not like being kept in limbo.

In terms of an agency’s obligations towards tenants it is important, in terms of good management, to prioritise. Every agent will know that unfortunately the nature of the business is that problems do not come through at regular “spaced out” intervals. It is nearly always famine or feast. There will be two weeks of relative quiet and then on one morning the phone will ring off the hook. Five boilers have gone down. Two separate tenants have locked themselves out. Three roofs are leaking. The police have raided a property for drugs. All within the space of two hours.

In terms of an agency’s obligations towards tenants it is important, in terms of good management, to prioritise. Every agent will know that unfortunately the nature of the business is that problems do not come through at regular “spaced out” intervals. It is nearly always famine or feast. There will be two weeks of relative quiet and then on one morning the phone will ring off the hook. Five boilers have gone down. Two separate tenants have locked themselves out. Three roofs are leaking. The police have raided a property for drugs. All within the space of two hours. And, yes, half the staff are away due to illness or holiday. It is important that ALL of the staff are able to deal with these situations and know who to ring and what to do.

In such circumstances where the agency has limited resources, the list of items to address should be prioritised. Clearly, water pouring from a pipe is more urgent than a hinge coming loose on a wardrobe door.

One of the major complaints made about letting agents generally is lack of response when a repairing issue occurs. Many organisations have an enthusiastic lettings team who are very good at selling properties to potential tenants (although in reality a good property will sell itself). However, the initial enthusiasm tends to wane when tenants ring with a repairing issue. There is no surer way to lose tenants than to deal inadequately with problems. It is accepted that agents will in many instances have to take instructions from client landlords who are often reluctant to spend money.

One of the major complaints made about letting agents generally is lack of response when a repairing issue occurs. Many organisations have an enthusiastic lettings team who are very good at selling properties to potential tenants (although in reality a good property will sell itself). However, the initial enthusiasm tends to wane when tenants ring with a repairing issue. There is no surer way to lose tenants than to deal inadequately with problems. It is accepted that agents will in many instances have to take instructions from client landlords who are often reluctant to spend money. However, it should be pointed out to such landlords that it is in their interests to have the matter dealt with promptly. A minor leak that costs £150.00 to fix today may cost £4,000 in 6 months.

When letting agency staff attend a property for whatever reason they have a duty of care to the tenants make sure that the property is safe. If, for example, the tenants have taken the batteries out of a smoke alarm, have moved a bed into a lounge with an open gas fire or it is clear that they are using candles near a pile of newspapers they should be warned about these hazards both verbally and in writing. If the behaviour continues the landlord should be informed and instruction sought about the possibility of serving a section 21 notice to end the tenancy, assuming of course that one is not already in place. In addition, if an agency continually reports health and safety issues to a landlord who instructs them to ignore the issue such an agency should seriously consider issuing a notice of disinstruction to the landlord.