X

Sign Up

or

By signing up I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Sign Up

Sign Up With Facebook, Twitter, or Google

or


By signing up, I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Log In

or


Don't have an account? Sign Up

Forgot Password

To reset your password just enter the email address you registered with and we'll send you a link to access a new password.


Already a PT member? Log In

Don't have an account? Sign Up

  • Buy-to-Let

    Vetting a lettings agent - what to look for?

    Hi

    I am looking for estate agents and wanted to check what registrations and qualifications I should be looking for?

    And anything else you recommend? I had v bad experience with agents in the past so want to be careful this time around!!

    Cheers and thanks for your sharing your thoughts and advise..

    Regards

    Waz

    0
    0

    Hello Waz,

    I hope you received my long email on this topic!  If you want to give me a call to discuss, please do.

    All the best

    Helen


    0
    0

    Thanks tried to ring you but it seems line was not bad. Will try again..

    I did dropped you an email.


    Cheers


    Waz

    1
    0

    Hi Waz,

    There are no formal qualifications needed to become an EA. However there are regulatory bodies that can assist you in finding the more reputable ones and if they do have qualifications again this adds to their validity.

    So formal qualifications: RICS is the best, Level 3 or Level 4 in Residential Sales qualifications are also available; memberships to the National Association of Estate Agents (NAEA); ensure they are members of the Property Ombudsman so that they are governed by a code of ethics and you have a formal complaints body to use, should the worse happen...again; look for properties recently marketed on Rightmove vs their sold prices on Zoopla will give you a % of asking price achieved; but most importantly, look for reviews, word of mouth is the strongest indication of an estate agent.

    Just a few pointers there, hope this helps. 

     

    0
    0

    Hi Waz,

    Are you asking about Estate Agents (property sales) or Lettings Agents?

    They have different regulation and compliance requirements.

    0
    0

    Hi Vanessa

    Looking letting agent

    Sorry should have said that in there.

    0
    0

    Thanks Vanessa. 

    I found Northwood v professional chatting through. Now need to get the nitty gritty info. 

    0
    0

    Due Diligence at finding a New Letting agent


    Finding a Letting agent is the most important part of your investment into property. If you don’t find the right agent to work for you the chances are that you will not see a return. The following guide is only meant to help. It is based on my personal experience as a property investor and independent Letting Agent.



    Search the internet and find an ARLA agent close to your property.  If the agent is close to the property they are in a better position to visit it and ensure its smooth running

    Why not NAEA, NALS or RICS?

    NAEA is the national association of estate agents it does not specialize in Lettings

    RICS is the Royal institute of Chartered surveyors and although this is a professional body it does not specialize in Lettings

    NALS Website down but does not offer the same protection as ARLA. They do not insist in client protection insurance

    RLA only have a code of practice with no checks on training or insurance criteria

    SAFE AGENT Safe Agent Fully Endorsed – is a mark denoting firms that protect landlords and tenants money through client money protection schemes.

    Deposits

    .Tenancy deposit protection schemes - when to use them

    Tenancy deposit protection (TDP) schemes guarantee that tenants will get their deposits back at the end of the tenancy, if they meet the terms of the tenancy agreement and do not damage the property. Landlords must protect their tenants' deposits using a TDP scheme if they have let the property on an assured shorthold tenancy (AST) which started on or after 6 April 2007.

    If these conditions don't apply - for example, because you live in the property with your tenant - you do not have to protect your tenants' deposits. However, it is still good practice to do so.

    Landlords or agents must use one of the three approved TDP schemes to protect tenants' deposits where these conditions apply. If any other scheme is used, deposits are not protected in law. The three approved schemes are:

    • Deposit Protection Service (DPS)
    • My Deposits
    • Tenancy Deposit Scheme (TDS)

    If you don't protect your tenants' deposits when required to, your tenants can take you to court and you may have to repay them their deposit plus between one and three times the amount of their deposit. You will also be unable to seek possession of your property in certain circumstances.

    The schemes:

    • encourage landlords and tenants to draw up clear tenancy agreements
    • provide a free service to resolve disputes

    TDP schemes do not cover holding deposits. Tenants can pay you holding deposits before they have signed a rental agreement. You are not required to protect a holding deposit with a scheme before someone becomes your tenant. However, once they are your tenant the holding deposit becomes a deposit which must be protected with a scheme.



    Personal Thoughts

    I would rather go for an independent agent rather than a large company because of the personal service they can offer. There are further reasons listed below. My preference would be to go to a company that is solely a Letting Agent and not an estate agent also.

    In the current market there are many estate agents that have jumped to letting because of the lack of sales they have very little experience in most cases

    It is reasonable to take all of these precautions however depending on the type and position of the property they may not all apply. I.E in a predominant Local Housing Allowance area the chance of finding a tenant that would pass a rent guarantee insurance conditions may delay in you getting a tenant into your property quickly


    Licensed ARLA agent you are guaranteed:


    • That the agency is covered by our Client Money Protection (CMP) Scheme.

    Should your agent misappropriate your rent, deposit or other funds the NFOPP will consider a claim to compensate you. This operates in the same way as the ABTA Bond for your holiday.

    The Client Money Protection Scheme will compensate a landlord or tenant up to a limit of £25k. However, landlords are limited to a maximum of 3 months rent. The total maximum payable in respect of a member company would be £500,000. In any one year the scheme has a limit of £3million.

    The agent would have passed a respected knowledge of the lettings industry after training with the NFOPP (national federation of property professionals).

    • .
    • That the agency has Professional Indemnity Insurance.
      • This ensures you are financially covered for successful claims relating to members' negligence, bad advice or mishandling of data...
    • To be consulting with a qualified and trained agent who can give you professional up-to-date advice and guidance.
      • All our members are required to carry out at least a minimum level of Continuous Professional Development (CPD) each year and many do more.
    • That you are dealing with an agent who voluntarily follows the Code of Practice and Rules of Conduct lay down by their professional body.
      • If an agent does not follow the code, they can be fined or in the worst cases expelled from membership of ARLA. Our disciplinary process includes everything from cautions and warnings right through to more severe penalties of up to £5000 for each rule breached. You can be sure that the highest standards are upheld by our members.
    • That you have a route to redress should something go wrong.




    Once you find you ARLA agent visit the branch and ask the following

    Ask how they reference prospective tenants and what outside agents are used for this scheme?  Do they get a copy of driving license, passport, birth certificate, previous tenancy agreement, copy of benefit entitlement, bank statements, wage slips, utility bill. Do they get a reference of the previous landlord and employer? Do they visit the prospective tenant in the own home to get the paper work and access they present living conditions. Do they use landlord referencing? Do they credit check the prospective tenant?

    Ask if a rent guarantee policy is available?  What are the cost and the terms and conditions? It is a requirement that the tenant should pass a certain criteria however if they can pass this criteria is the extra cost of the insurance required.

    Ask if they get a guarantor? The same process should be taken on the guarantor as the tenant, (copies of relevant documents). It is also advisable that the guarantor owns there own property in case of any recourse.

    Energy Performance Certificate (EPC). It is a requirement that the EPC is carried out before marketing a property and needs to be renewed every 10 years.

    Ask what fees they charge for finding a tenant and there management fee? These fees vary from agent to agent however the cheapest is not usually the best. Ask if there is any additional cost such as registering the deposit, inventory, informing utilities and council tax etc. Do they charge for the moving out inventory or property checks? Do they charge for the referencing?

    How do they advertise the property? Do they advertise the property on Right move, find a property, Zoopla etc. Have they a high street presence and do they put “to let” boards up?

    Can they find a tenant that fits your criteria? If you want a non-smoker or maybe a tenant without pets are they able to help.

    Benefit tenants If the tenant is on benefits or comes out of work do they assist the tenant with the claim and are they experienced in this field. Can they ensure that the claim is processed speedily? Are they able to get direct payments from the local council?

    Ask what fees they charge the tenant? These fees vary from agent to agent however the cheapest is not usually the best. Ask if there is any additional cost such as registering the deposit, inventory, informing utilities and council tax etc. Do they charge for the moving out inventory or property checks? Do they charge for the referencing or an application fee? Are these fees for the tenant/cohabiter /guarantor?

    Ask how the rent is collected? Do they accept debit/credit cards, standing order, direct debit and cash payments?

    How do they chase late rent payments? Do they phone, write and attend the property to find out why the rent is late?

    How quickly after the tenant has paid do you receive a statement and the money? How do you receive your rent? It is fairly normal to receive your statements by email and funds should be sent as soon as possible after it has been paid. We aim to pay within 5 days

    Ask how long they the AST will run for? After 6 months does it become periodic and ensure no further fees are charged. I would not expect the tenant or the landlord to be charged for moving the tenant into a periodic tenancy nor do I see the point in renewing the tenancy.

    Ask how often property checks are carried out? Can you see a copy of a typical property check?  Can they give you a copy each time your property is checked? How do they action any incidents or damage?

    Ask if they serve a section 21 at the start of the tenancy and renew it periodically?

    Section 21 of the Housing Act 1988 details the recovery of possession on expiry or termination of Assured Short hold Tenancy, i.e. how a

     Landlord exercises his legal rights to obtain his property back at the finish of an Assured Short hold Tenancy.  Issuing a section 21 at the

    time the tenancy starts is a good insurance policy. You don’t have to use it and if your tenant continues to fit your requirements after the six

    months tenancy expires it then becomes a periodic tenancy.


    Ask how far they go in evicting the tenant? Are they willing to complete the section 21 eviction process/? Will they take on a section 8 evictions and complete the paperwork? Will they go to the small claims court at your expense to get unpaid rents or claims in regard to damages?

    Ask about there maintenance services? Ask if they charge a fee on top of the contractor’s price for carrying out repairs etc. Are you able to use your own contractors? Can they provide more than one estimate if required? Do they check the workman are qualified in there trade and ensure they renew there liability insurance annually?

    Gas Safe. Is the gas safety arranged every twelve months and is the landlord and the tenant given a copy. This is the legal responsibility of a landlord.

    Repair and maintain gas pipework[1], flues and appliances[2] in safe condition

    Ensure an annual gas safety check[3] on each appliance and flue

    Keep a record[4] of each safety check


    Electrics. It is not a legal requirement to have a certificate to say the electrics are safe the Landlords and Tenants Act 1985 requires that the electrical installation in a rented property is:


    Safe when a tenancy begins and


    * maintained in a safe condition throughout the tenancy

    The following should be considered as a safe guard

    A Periodic Inspection is an inspection on the condition of an existing electrical installation, to identify (in order of priority) any deficiencies

    against the National standard, BS 7671 (IEE Wiring Regulations) for the safety of electrical installations. Every electrical installation

    deteriorates with use and age. It is important that landlords ensure that tenant(s) are not put at risk, by ensuring that the electrical

    installation continues to be in a safe and serviceable condition.


    Ask how they deal with emergencies at weekends and evenings?  Do the tenants have an emergency number they can phone and how there concerns dealt with?

    Keys Do they keep spare keys and are they kept safe?

    Ask to see a copy of the AST they issue? Once the tenant is in place can you have a copy of the AST and all references? Can you have a copy of the GAS certificate annually as it is carried out? This is for your peace of mind. It is you legal responsibility to ensure this is in place.

    What deposit scheme is used? Can you have a copy of the Deposit receipt indicating the scheme used. It is your responsibility therefore this is the only way you can ensure it has been carried out?

    When is the ARLA registration renewal due? It can then be checked that they are still a member online at this time. This will mean there insurances has been renewed and membership to the arbitration service

    Ask which dispute service they use? Property ombudsman etc. This membership is a requirement of ARLA therefore proof has to be provided on renewal.

    Ask what is the redress if you are unhappy with there service? How much notice is required to move to another agent or self manage? Will they co-operate in the moving of your property to another agent? Will they charge anything for this?

    Is there a NFOPP trained member of staff in each branch? (some companies have one member and many branches, you are more secure and better advised by having a member in branch) this is the reason I suggest an independent company. If you use a franchised company you will find that each office is responsible for there own liabilities and could cease trading independently from the franchise. If it is a small group they may have a person who has passed the qualifications in one office but not all branches. If the Letting Agent is impendent ensure the qualified person works from that office and is not only a figure head.

    Is the company a LTD Company? If the company is a limited company carry out a credit check on the directors. Search Company’s House to ensure the company is complying in with company rules (accounts in on time)

    Search the directors to see if they are involved with any other company’s that may have ceased trading. This gives you confidence they are not setting up company’s and then sending them into liquidation to avoid there liabilities

    Are they able to provide recommendations for insurance, solicitors, mortgage advisors etc?

    If the Letting Agent is acting responsible they will ask you for photographic ID (passport, driving license) a copy of the latest mortgage statement and a copy of your recent bank statement. The bank statement should be provided for the account in which you wish your rents to be paid into. These measures are to ensure that the property you wish to let is owned by you and the bank statement is ensuring that there isn’t a case of money laundering. Checks may also be made with the land register to ensure the details match. In some cases a credit check against the landlord maybe made to ensure they are able to carry out there duties in respect of the tenancy agreement. If for some reason you are having difficulties with your mortgage payments please ensure that you make the letting agent aware and there may be some help available. Please do not be alarmed by this but there are many people renting properties that then try to sublet them. I am sure that if your property was a result of this type of fraud you would be asking why this precaution was not taken.



    The Lettings industry is at present free from regulations therefore anyone can set up a letting Agency with no suitable qualifications or experience. It is therefore paramount that you are careful in deciding which letting agent represents you best to protect your investment. If the letting agency has been going for 10 years or more and is not a member of an accredited body you may find that they just couldn’t be bothered, therefore can they be bothered in looking after your property. The lettings industry is very competitive at present and although some agents offer management as low as 5% they must be charging high extras/hidden charges to cover there loss. If they are not managing at the right cost or the right number of property’s they may start using your rent or deposit to support its financial situation leading to its eventual failure and loss of money.  The above is by no means a guarantee however it will mean you are minimizing risk. You will get some if not all your loses back should your agent fail and they have client protection insurance.

    Some of the advice given does go well over the top however property investment involves large amounts of cash and this is why it is necessary to take extra precautions.

    Taking these steps will show your agent that you are well informed and this should lead to a better service and hopefully a long working relationship to mutual benefit.

    0
    0

    [Image: New-logo2.png] Manchester based investor. I buy, sell, renovate and rent investment property in East/North Manchester Wink email: mike@brentwoodinvestments.co.uk Call: 0161 681 3724


    I too prefer independant agents, where you can deal with the boss directly, and it is their reputation that is on the line.

    0
    0

    As well as the usual things like making sure the agent is a member of all the necessary accredited organisations, there were a few other things that swayed me in my eventual choice.

    Quality of their letting advertisements.  If they can't be bothered using correct grammar and spelling, are they going to be bothered looking after your tenants and property?

    Who answers the phone?  A grumpy or disinterested person isn't the first person I want myself or my tenants to encounter.

    Is the agent who meets you at your property for the appraisal going to personally manage your property?  Are they pleasant, enthusiastic and professional?  The young woman I chose won me over with her enthusiasm for my properties, her realistic advice and appraisal, and the respect she demonstrated towards tenants when we discussed aspects of property management.  She also responded to my email inquiries quickly, even if just to tell me she was tied up but would email/call me at a specified time.

    Taking the time to develop a good relationship with your letting agent makes good sense.  When I contacted mine to get her to appraise my second property, I asked if we could discuss a discount on management fees.  With no fuss at all, she reduced my fees from 10% +VAT to 8% + VAT.

    Happy landlord, happy tenants, happy letting agent.

    0
    0