Brighton letting agent closes owing thousands of pounds to landlords and tenants

A Brighton letting agent has closed down owing hundreds of thousands of pounds in deposits and rents to its landlords and tenants. It is not clear whether the funds were registered with an authorised deposit protection scheme or held in a protected account.

Says Leaders’ Sussex Director, Jane Wilkinson: “This is yet another distressing case of a letting agent disappearing owing its clients’ money. Unfortunately we have seen far too many cases like this in the 30 years we have been in the industry. 

“As the private rented sector grows, more people are using letting agents, unaware that there is no proper regulation governing them, and in particular over how they handle client money. This case highlights the fundamental lack of controls on letting agents, which people need to be aware of so that they can take steps to protect themselves.”

Leaders advice to landlords and tenants is simple. You are only protected if you use an agent that is a member of a professional body such as ARLA, NAEA or RICS. These organisations are self-regulating and ensure that clients’ money is held in separate, ring-fenced accounts and properly protected.

“But it’s not only about money,” says Jane: “Letting and managing rented property requires in-depth knowledge of the many rules and regulations governing residential lettings.

“Letting agents should have the resources, knowledge and training to look after every single tenancy correctly and efficiently. If not, major problems can arise for landlords, who are ultimately liable for the actions – or inactions – of their agent. For tenants it can literally be a matter of life and death if legislation regarding the safety of the property and its contents is not complied with, for example gas, electrical and fire safety regulations.

 “When you consider the many potential risks to the public, it is shocking that any person or organisation can become a letting agent, with no training, qualifications or financial probity. Until there is proper regulation in place, unprofessional, unqualified and unethical agents will continue operate to the detriment of unwitting landlords and tenants. This is particularly worrying at a time when more and more people are turning to the private rented sector for their housing needs.”

Leaders advise landlord and tenants to make sure their chosen agent is a  member of a professional body such as ARLA or RICS, that they have Client Money Protections, qualified staff, many years experience and ideally specialise purely in lettings.

Leaders are members of ARLA, SAFEagent and The Property Ombudsman. For advice you can trust on all aspects of letting and renting please contact your local Leaders branch or visit www.leaders.co.uk:

Brighton North Laine, New Rd: 01273 675571  
Brighton, Western Rd: 01273 720714
Brighton, Fiveways: 01273 561534
Hove: 01273 321721

To find an ARLA, NAEA or RICS member letting agent visit:
www.arla.co.uk
www.naea.co.uk
or www.rics.org

Posted 20-05-2013