Estate Agents who become Part Time Letting Agents BEWARE says @MarkTrenfield

Hi Mark,

Interesting points you raise in this blog.

If a letting agent joins an industry body such as ARLA or NALS and also registers with a client money protection scheme, there is some peace of mind for the Landlord and indeed tenant as, at the very least, they know their monies are protected, should the agent go out of business.

It's also worth mentioning that no one can divest a Landlord of their responsibilities ... not even a lettings agent employed on a "fully managed" basis.

As a specialised letting agent I am a little puzzled as to why anybody, let alone a so-called expert, would decry using a third party for inventories as my understanding is that these are the only ones that stand up in a court of law. They need to be truly independent. Also, surely it is better to deposit bond monies in a custodial scheme rather than entrust it to an agent who may abscond, as several have done lately. Am I missing something? David Benson of Ellis and Co

Great article Mark. A good letting agent is worth their weight in gold. But do you not think a good estate agent can learn lettings skills. No reason why a good estate agent wouldn't apply the same professionalism to the lettings sector. And no I'm not an estate agent :-))

Custodial scheme - good idea why let a party with a vested interest hold the deposit i.e. the landlord
Independent inventories - very good ide most Landlords don't have a clue
Estate agents come lettigs agents no idewa of thw Law? So private Landlord do then do they?

Hi Francis, Thanks for your comment. I agree that an estate agent could learn the skills to become a good letting agent and a letting agent could learn the skills to be a good estate agent.

However, the problem is that many Estate Agents are simply launching letting departments (in a desperate search for additional income) - without learning, or even understanding, those skills and this is compromising their landlords and, possibly, the safety of their future tenants - hence the reason for the article.

Hi David, I agree that an inventory needs to be independent. That is why a letting agent or a 3rd party inventory company is best preparing them.

I was going to write a future blog on why I don't believe that 3rd party inventories deliver value to landlords - but I will touch on a couple of points now.
Don't get me wrong - 3rd party prepared inventories (from inventory companies) look beautiful - often presented on glossy paper - with lots of photographs - lots of details and fully signed by the future tenant at check in and check out - ALL AT CONSIDERABLE LANDLORD EXPENSE.
But do they enhance or damage the tenant / landlord relationship?
A fully checked-in, checked-out tenant with a professional inventory from a 3rd party company can cost the landlord about £350 / £400 - yet the average security deposit is only £600. So, the landlord is spending £350 .. to gain a £600 .... not a great return on investment?
Glossy paper does not protect your property from tenant damage though! They are only semi-useful if you cannot agree with your tenant (what damage they have done) at the end of the tenancy.
Having a great relationship with your tenant is fundamental (and much cheaper than paying an inventory company) to being a good landlord. Compromise with the tenant is always the better approach than legal proceedings.
By example - a 3rd party inventory will prove that the tenant had burned an iron stain in the landlord's carpet yet the tenant wouldn't accept the landlords demand for a new £300 carpet. The issue went to adjudication and the adjudicator awarded the landlord £45 (to buy a rug to cover the stain).
So the inventory etc cost the landlord £350+ - the award was £45 - the carpet cost £300 - the landlord would have been better off with a less glossy inventory and a better working relationship with his tenant in my opinion!

A quick word on custodial versus insurance based schemes. Good tenants have to wait up to 10 days or longer to get their security deposits back from the custodial schemes (and much longer if there is a dispute over deductions etc). I accept your point about bad agents absconding (but client money protection insurance should fix this issue).

We expect our tenants to give us their security deposit (in cleared funds) at the start of the tenancy and I believe we should return the deposit at the end of the tenancy (not 10 day+ later).

I know of many happy tenancies that have ended on a sour note because the money had been sent to the custodial scheme and the tenant could not raise the deposit funds for his next landlord.

one such agent around here gets vendors of properties he can't sell to let them out.
He then puts tenants in, but badgers the tenants to keep looking at properties to buy as first or second time cash buyers in a postion to move.
The tenants then leave the rented property after 6 months or so into the property the agent has sold them.
The agent then suggests to the landlord that now is the time to sell as the tenants have left.
It represents good business for him (in financial services, its called churning) and for some landlords it works well.
For the majority of professional landlords however it results in lower returns from high voids, fees and refurbishment costs.
But then the estate agent is only interested in lettings whilst it suits him, not for the longer term.

There is a lot more to a solid Inventory than protection against loss or damage and reclaiming monies from a tenants deposit.
If the Inventory has been done properly by the landlord, Agent or Inventory Clerk, it will be snapshot of exactly what the tenant is taking and the landlord is giving. It will include the location of each item and the fact that items with working parts have been provided with Manufacturers In Use and Safety Instructions. Why?
I need to protect myself against litigation and a good Inventory is my best defence
If there is a fire and a tenant is hurt by smoke from a piece of furniture that does not have fire safe covering or filling - it was not on my inventory the tenant brought it with him
If someone trips and is hurt because furniture is badly placed - this is how I left it as you will see from my Inventory
If a tenant is hurt because he is using a piece of equipment that I have supplied - was it used in line with the Manufacturers recommendations? If it was it is the Manufacturers problem not mine. If it was not, why not because the information was given with the item
I never argue over a few pounds worth of damages or losses I prefer to pay 100% of my deposits back to my tenants BUT in an increasingly litigious society I need to cover my back.

I totally agree Mary, it makes virtually no difference whether the inventory is done by an agent, a landlord or an independent inventory clerk. I say virtually no difference as it comes down to two main factors; competence and cost.

We can all be competent with a phone App like Imfuna, it takes very little time and costs about £1. The end product is very professional and it would be difficult to say who had carried out the inspection.