Letting agents are under fire from all sides due to a lack of standards in the private rental market.
The litany of wrongdoing and bad practise includes one crooked letting agent who diverted cash from collected as deposits from tenants to stave off a financial crisis in his business.
Tim Catherall was manager of Hartleys Estate Agents in Beeston, Nottinghamshire.
He was sentenced to 20 months in jail suspended for two years with 200 hours of community work after admitting to dishonestly making a false representation for gain.
Nottingham Crown Court was told Catherall took 27 deposits from 17 landlords totalling £26,475 between 2009 and 2018.
Detective Constable Chris Underwood says: “Catherall stole from his clients and tried to justify to himself that he was doing it for the good of the business which he has now lost. He has also lost a tremendous amount of pride and now has been left with a criminal record.
“His actions cost dozens of people hundreds of pounds and caused a huge amount of stress and worry.”
Catherall’s landlord victims are unlikely to see any of their lost cash as the 53-year-old letting agent was declared bankrupt in 2018.
Call for tougher letting agent regulation
Meanwhile, a new study by building society Nationwide and homeless charity Shelter is calling for tougher letting agent regulation to drive up standards in the industry.
The report urges the government to licence all letting agents to force them to take professional qualifications and to follow a code of practice.
Other recommendations include:
- Scrapping no-fault evictions
- A national landlord and HMO manager database for England
- Abolition of Right to Rent
- A new regulatory body for the private rental sector that can offer redress to renters
- Tougher enforcement of property laws
A joint statement from Shelter chief executive Polly Neate and Nationwide chief executive Joe Garner says: “Many private renters are still faced with poor quality housing, poor landlord, housing management agent and letting agent practice and discrimination. Renters also face an underlying lack of security and power.
“Over the last 15 months, we’ve conducted extensive research. We have interviewed a broad range of stakeholders including private renters, users of Shelter’s helplines, local authority officials,
Shelter’s legal advisers and case workers, representatives from sector organisations and landlords.
“They told us about the many issues private renters face from poor housing standards and bad practice to discrimination and a lack of power.”
Reveal referral fees, says Property Ombudsman
In a separate statement, Property Ombudsman Rebecca Marsh wants letting agents to disclose referral fees to landlords and renters.
Rebecca Marsh says she is not against letting agents charging tradesmen fees – providing the amounts are disclosed.
She was commenting on research handed to the government by the National Trading Standards Estate and Letting Agent Team (NTSELAT).
The data revealed nearly two out of three letting agents registered with the Property Ombudsman redress scheme had referred customers to other companies, while 48% had received a fee in return for the referral.
“Referral fees themselves are not necessarily bad. However, not disclosing these to consumers undermines trust and confidence in agents. Put simply, we share the view that disclosure is the key,” said Marsh.
News probe alleges property repair scam
An investigation is underway at a letting agent in Scotland accused of overcharging customers and setting up bogus companies to carry out maintenance work at rented homes.
Scottish newspaper the Daily Herald claims 15 landlords, tenants and contractors have lodged complaints about Martin & Co in Stirling.
The story adds trading standards officers, and the Property Ombudsman are probing the allegations after a dossier from the paper was passed to them.
Martin & Co confirm a landlord has complained to the Stirling branch, but the firm has not heard from any other body.
Landlords blamed for letting agent shortcomings
David Alexander of apropos Lettings Management, a fintech disruptor offering landlords a platform to self-manage private rented homes, argues unscrupulous agents are leaving landlords to face the consequences of failing to do their job properly.
“We have been encountering many landlords who are unaware that they are liable for any failures to comply with regulations. Even if they don’t personally manage their properties and it is an agent or another individual who is directly involved with the letting, they remain liable for any breaches of the regulations,” he said.
Alexander has listed a catalogue of mistakes he has uncovered when visiting rented homes for landlords.
His list includes:
- A property with a fuse board that would not pass current electrical regulations after a letting agent told him they are ignoring the law that says all rented homes should have a valid electrical safety certificate from July 2020
- Another property for handover was riddled with damp and mould that the letting agent had not told the landlord about. The damp was a health rating issue that potentially made the home unfit to live in
- A four-bedroom home without smoke detectors also breaks the law, but the agent said don’t worry, the tenants will put them in if they want them
“When we have told landlords that they have not been compliant they have been genuinely shocked and appalled that they were liable for these regulatory breaches yet had not been informed of outstanding issues,” said Alexander.
“Landlords need to know that they can trust their agent to keep them on the right side of the regulations and to ensure tenants are safe and happy. Trying to get away with these examples of atrocious service and disgraceful behaviour is simply unacceptable and must be stamped out.”