Wednesday, November 6, 2024
Aimed at raising awareness and standards in the property industry, our expulsions updates offer some insight into what leads up to the Property Redress’s decision to expel a member, following a lengthy disciplinary process. Our update includes an explanation of the facts that we considered when assessing each case, and the outcome, including details of any award made
The group of agents in this report were expelled at different stages of our process, some early due to not engaging with us (default) or where they have agreed to resolve the case but then not complied. Others went through the proposed, review and final decisions and still refused to comply. National Trading Standards are notified of all members that we expel.
The agent was routinely late in transferring the rent they collected, from tenants in two properties, to their landlord client. This caused the landlord stress and inconvenience as they were struggling to pay their mortgages on time. This was a guaranteed rent arrangement and at the time the decision was proposed, £5000 was outstanding and the landlord had terminated the management agreement. Both parties agreed to a payment plan for the rent outstanding and £200 for the stress and inconvenience. The landlord received no money and the full £5,200 plus a penalty fee remain outstanding.
The complaint was that the agent was not managing the property properly or providing the requested documents, reports, accounts and invoices which caused distress and inconvenience. The evidence showed a lack of communication between April and August 2023, when the agent apologised for their poor service standards and organised a meeting to resolve all outstanding issues. The agent then was non-responsive. The agent did not engage with us or provide any evidence supporting their position. The decision confirmed that while we have no authority to consider service charges and could take this to the First-Tier Tribunal, we could consider the level of service and the documents which should have been provided.
The agent was claimed to have:
The evidence showed communications from tenants and bank statements confirming rent had been paid and while another tenant paid their rent in cash, and this payment was contended by the agent, on balance, there was no evidence that the agent had chased it. The agent was found responsible for poor management and not acting in the best interests of their landlord client. The decision was for the agent to pay the landlord £800.00 compensation for poor service and to transfer the £5,610 rent collected.
The complainant was interested in the opportunity to invest in a ‘hotel’ property offered by the agent and claimed that consumer law was breached, some material information was missing which was essential for making an informed decision to proceed.
The decision found that the complainant was misled by the agent, in breach of the Consumer Protection Regulations. The agent was to manage the property and business on the complainant’s behalf but there was no commercial lease or tenancy agreement in place and no evidence that the business model was explained to the complainant. The agent was also found to have removed furniture before the tenancy ended.
The final decision confirmed the original £250 compensation awarded was reasonable for poor service and also awarded the complainant £15,350 (£7000 rent, £7000 deposit, £600 council tax and £500 for the ambiguous reservation or furniture fee).
The landlord complainant said that the agent collected the rent, which was either delayed, received sporadically, or not at all, inspection reports and other documents were not provided, and the agent’s communication was poor. Maintenance issues were also raised and not dealt with. The agent provided no response or supporting evidence.
The complainant’s evidence showed that tenants paid rent late and two months remained outstanding. At no stage was the landlord kept updated and informed, nor did they provide the documents requested by the landlord, which were all reasonable, including invoices and proof of deposit protection. Due to the lack of a management agreement and enough proof that the agent was providing a fully managed service, a certain level of care and service was owed to the complainant, which had not been received.
The decision was to pay £1700 outstanding rent with no management fees deducted due to poor service, provide certain documents and pay £350 compensation for distress and inconvenience in the absence of the documents requested.
For several months the agent delayed or did not transfer rent payments which had been collected from the complainant’s properties they managed, taken advance fees for purchasing other properties and not provided the services which were agreed. Between August 2023 and January 2024, the parties were communicating about rents, tenant referencing for other properties and some property maintenance. The agent then advised that the business was going into liquidation and no longer responded to either the complainant or to us, when dealing with this complaint.
With no evidence or response from the agent, the decision was that the agent was responsible for paying a total of £17,638 which included outstanding rent, costs paid by the landlord for renovation that were still needed and fees for a property purchase that had fallen through.
