An unregulated letting agent going out of business, leaving thousands of landlords and tenants out of pocket, has unfortunately become an all too frequent story in the press.
Whether it is a well-intentioned business hitting financial difficulties and going under or a rogue agent out to make as much as possible from landlords before being shut down, using an unregulated agent can be a risky business.
So what should you do if you find out your letting agent has gone bust?
• Stop your tenant paying rent to the letting agent that has gone bust
• Find out your agent’s trading status - individual, partnership or company - and consider serving a bankruptcy or liquidation notice
• Ensure that your property meets legal requirements that might previously have been managed by the agent, including the provision of an HMO licence, gas safety certificate and insurance
Once you have dealt with these points, it is time to consider instructing a new letting agent to manage your property or portfolio.
Searching for an agent with local expertise, a long history of success in the industry and a strong reputation is important. But perhaps most crucially of all, you should consider only those letting agents that are regulated by the Association of Residential Letting Agents (ARLA).
By using an ARLA-registered agent - such as Leaders - your money is protected by the Client Money Protection Scheme, professional indemnity insurance is in place and you have a route to redress should something go wrong.
You can also be sure that any ARLA-registered agent is following the body’s code of practice and rules of conduct.
Sadly we have seen many landlords affected by letting agents closing down, going bust or simply disappearing. That is why we offer a special managed service for such landlords that includes:
• A full review of the tenancy agreement
• Contact with your tenant to stop any rental payments going to the previous agent and arranging for the rent to be collected
• A full legal and compliance check, including ensuring a gas safety certificate, EPC and other essentials are in place
• An initial property visit and condition report to check the property is being looked after and is in good order (followed by periodic visits throughout the tenancy)
If you would like more information or advice on how we can help you if your existing agent goes bust, please contact your local Leaders branch.