Why Regulation is so important

Increasingly we find that both landlords and tenants have become victims of at best bad practice and at worst, dishonesty. Simply, many agents simply don't understand the changing legislation and the affect it may have when things go wrong. Many are using flawed tenancy agreements and notices which the Courts would reject. Others don't have the skills or experience needed to deal with difficult situations, such as arrears, nuisance or abandonment.

Many Landlords are keen to ensure they pay the lowest possible commission, but rarely is the cheapest option the best. Low fees result in staff earning low commissions and as such an agent can rarely afford to employ the best people and invest in training. That is why so many seemingly cheap agents have such high staff turnovers and why landlords complain that they rarely speak to the same person twice.

Likewise, it is essential that the deposit paid by the tenant is dealt with properly. If a deposit is not registered then it is the landlord not the agent who is liable for a fine of 3 times the amount of the deposit. In the event an agents business fails, it is also the responsibility of the landlord to refund the deposit to the tenant.

The safe way to select an agent before the subject of fees is raised is to check their credentials and accreditation. An agent engaged in lettings should be a member of ARLA or NAEA. If they are not, ask yourself why. These organisations insist upon client money protection insurance, Professional Indemnity Insurance together with strict audits of the clients account. Membership of the Property Ombudsman is no guarantee as they only award compensation when things go wrong. An agent who has gone bust cannot pay any award whilst Clients Money protection Insurance will.

Bushells has been part of the campaign to ensure the mandatory licensing of Lettings Agents, until then, choose and agent who has subscribed to stringent regulation and auditing. Please be clear, agents who are not members of ARLA, NAEA, NALS, RICS or the Law Society do NOT have to have their clients account audited and you have no way of knowing that your money is where it should be. It may be in a dedicated, ring-fenced account, but even so, it is not ring-fenced from the Agent whose account it is.

Membership of these bodies is not cheap. Our fees for the Tenants Deposit Scheme rose 600% this year. Nevertheless, we believe such membership are necessary, not simply because of the protection they offer, but also the training and updates which go with it.

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