Rebecca Marsh

Although she understood that the reservation fee was non-refundable, she had asked that her circumstances were taken into consideration, together with the fact that the property sold again for a greater amount than she had offered. The agent said that having considered the buyer’s request, they did not feel it warranted a refund of the reservation fee. The agent offered the buyer £100, which she declined.

Investigation

The buyer received the auction pack and had initial discussions with the agent prior to the first viewing, confirming she had read the details of the auction pack. She also advised that she was familiar with the process used by the agent as she had bid on a property the previous year, although she had been unsuccessful.

The buyer said she was under a great deal of pressure…

Following the viewing, further calls took place in which the buyer listed the issues she had found with the property, the extensive work required and the proximity to a busy and noisy road. She mentioned that she did not consider it was particularly good value for money but it was on a good road that she knew well. The buyer said she had been following the property all year. At this stage she was still considering bidding at the auction but had not yet decided.

The agent reminded the buyer that she should do her due diligence and that she had to be happy. An example of the total cost was given including the fees. The buyer confirmed that she was in a good position as she was on the verge of completion, had her own house and cash. On the final day of the auction, the agent called before the end of the auction and the buyer advised that she was watching and was aware there were no other bids, saying she “checked it all the time”. No bids were received by the end of the auction and the agent contacted the buyer to advise that the vendor, who was motivated to sell, would potentially be open to offers. The property had been marketed with a starting bid of £375,000 and the buyer said that the vendor’s proposal of £350,000 plus costs would still be too much.

The buyer said that she would not make a decision, but would speak to someone first. The buyer subsequently made an offer of £325,000 which, based on the fact she was a cash buyer, the vendor accepted in preference to a slightly higher bid from someone who was not able to move as quickly.

No refunds

At this point, the agent reminded the buyer in several of the calls that the reservation fee was non-refundable and this was clearly stated on their website, the auction pack and the reservation fee agreement. The buyer confirmed that she was about to exchange on her current property and wanted to get going.

The agent explained the process of signing the reservation agreement after which payment would be taken and the property would be reserved for her. The agent offered to stay on the phone while the buyer completed the reservation agreement but she declined as she wished to read through it first.

In the next phone call, the payment went through, and the agent explained the onward process which included obtaining ID and proof of funding and solicitor details. Conveyancing continued for two months, and then late in the process, the buyer instructed a survey.

Following this, she contacted the agent to enquire about renegotiating the price or withdrawing, saying there was too much work to be done and that it was not suitable for her needs. The agent requested a copy of the survey however the buyer did not provide this.

During this call, the buyer acknowledged that if she pulled out, she could lose her fees. The agent advised that she could request a return of the fees, which they would present to the management team, but it was unlikely this would be granted.

The buyer withdrew from the purchase and made a request for a refund the reservation fee, which was declined. The property sold for £330,000, £5,000 more than the buyer offered. The buyer said that the property sold the following day. However, the agent’s records showed that the offer was accepted over a month later.

Conclusion

The Ombudsman was satisfied that the buyer had adequate time to ensure that the property met her needs prior to making her offer and was fully aware of her obligations when placing the offer. The Ombudsman was also satisfied that the agent not only clearly stated the terms of the reservation fee, but also reiterated these on several occasions and the buyer was fully aware that it was non-refundable unless the vendor withdrew.

The Ombudsman also advised the buyer the fact that the property was resold in a little over a month did not negate the terms of the agreement. There was no evidence that the agent applied any pressure for her to make an offer. As such, the Ombudsman did not support the complaint and did not consider that the circumstances merited an award of financial compensation.

The buyer was reminded that she was free to reject the Ombudsman’s decision and pursue the matter through the court.

The post No refunds appeared first on The Negotiator.

The estate and management company did not believe that their service fell short in this instance, stating that they did not agree to cover legal fees to resolve the dispute and no evidence had been provided to suggest otherwise, therefore the legal fees should be covered by the leaseholders.

Investigation

The Ombudsman noted that there was a disagreement with regards to the voting rights of the residents at the property between the directors of the resident management company (the leaseholders) and the estate and management company at the Annual General Meeting.

To resolve the dispute, the estate and management company opted to abort the meeting and seek legal advice regarding the voting rights of the residents costing £360. The leaseholders also opted to seek independent legal advice in an attempt to resolve the dispute in a swift manner resulting in a further charge of £660.

The leaseholders opted to seek legal advice…

The leaseholders felt that the estate and management company should be responsible for the entire legal costs as it was their misinterpretation of the details regarding the residents’ voting rights which caused the necessity for legal advice.

Contentious issue

Having considered the available evidence, the Ombudsman noted that the dispute at the AGM was a contentious issue. It was clear from the fact that both parties independently sought legal advice that the interpretation of the voting rights terms was not as clear as believed by the leaseholders. Therefore, the Ombudsman concluded that as both parties were clearly unable to come to an agreement on the interpretation of the voting rights, the act of seeking legal advice to resolve the dispute was fair and reasonable.

Rebecca Marsh

The leaseholders said that the estate and management company verbally agreed to cover the legal costs, but the agent denied this. As there was no evidence of this conversation the Ombudsman was unable to verify the claim.

Having considered the management agreement, the Ombudsman noted that it stated “issues of legal proceedings or instructions to Solicitors for Breaches of Covenant or other matters will be charged at £50, plus associated costs and disbursements (such sums will be recharged to the respective Leaseholder or Freeholder account).”

Legal opinion required – or not?

Based on the above, the Ombudsman concluded that the management agreement indicated that where legal involvement was needed, the cost would not be paid for by the estate and management company. Overall, the Ombudsman found the actions taken by the estate and management company to be fair and reasonable and therefore was satisfied that they were not liable for the fees.

With regards to the legal costs incurred by the leaseholders, the Ombudsman noted that the leaseholders stated that this was sought as they were unaware the estate and management company had also opted to seek legal guidance.

The email from the leaseholders to the management company after the AGM stated that they disputed the claim that they had agreed for solicitors to be involved, so they should not have the expense of the legal fees. The leaseholders then emailed the management company advising that if they were “still in the process of obtaining advice from any other source this should cease immediately”. However, at this stage, legal advice had already been sought by the management company who received advice later that day.

Deliberation

Based on the evidence, the Ombudsman concluded that on the balance of probability, the leaseholders were aware or should have been reasonably aware that the management company was already seeking legal advice on this issue. Therefore, she did not agree that the additional legal costs incurred by the leaseholders were ultimately necessary or the responsibility of the management company.

The Ombudsman was satisfied that the management company were able to obtain legal advice within a reasonable timeframe and as such found that the management company’s actions were acceptable.

Outcome

Given that the dispute centred around the need for a clear interpretation of voting rights, the Ombudsman considered that obtaining legal advice to resolve the issue was a reasonable approach. The evidence indicated that the leaseholders were aware of the management company’s intentions to obtain this advice and that, under the management agreement, the cost would be to them. As such, the Ombudsman did not support this complaint and did not make an award for compensation.

The post Who pays the lawyers? appeared first on The Negotiator.

The property was let to the tenant under an Assured Shorthold Tenancy (AST) for a period of twelve months, for a monthly rent of £3,500. The tenant’s complaint form stated that the EPC gave the property an EPC rating of F, which she says was out of date and the property was actually G at the point it was let.

The tenant stated that an Environmental Health officer surveyed the property and found it to present a severe risk of cold, as there was no heating. She has also complained that she was not given a copy of the EPC or EICR until several months after the start of the tenancy, when she requested copies.

In resolution, the tenant requested an apology and compensation. In response, the letting agent said that they were aware that the property had an EPC rating of F, but believed at the time that it was exempt from energy efficiency requirements on account of being Grade II listed, and that it had been registered accordingly. However, they acknowledged that their understanding of these matters at the time was incorrect.

The tenant was aware that the property was inefficient to heat.

With regard to the provision of the EPC and EICR, the letting agent said that whilst they were instructed to market the property to let and find a tenant, the landlord took direct responsibility for issuing documents at the start of the tenancy. Therefore, the letting agent said it was the landlord who was responsible for matters such as issuing copies of the EPC and EICR. They said that the tenant confirmed that she had had sight of these documents when she signed the agreement.

Investigation

The Domestic Minimum Energy Efficiency Standard (MEES) Regulations set a minimum energy efficiency level for domestic private rented properties. From 1 April 2018, private landlords were prohibited from entering into new tenancies to let domestic properties with an EPC rating assessment of F or G, unless an exemption applied, and was registered. The legislation sets out specific exemptions which may apply when a property has an energy efficiency rating of F or G. If a property meets the criteria for an exemption, it is possible to legally let it once the exemption has been registered on the National Private Rented Sector (NPRS) Exemptions Register. The above is reflected in the TPO Codes (4f and 6a), which set out agent’s obligations when letting residential property.

Rebecca Marsh

The Ombudsman would therefore have expected the letting agent to have established whether the property had a valid EPC, or one commissioned, before marketing the property to let. The Ombudsman checked the EPC register and have found that the most recent EPC certificate for the property was issued on 19 August 2019, and was valid for ten years until 18 August 2029. The letting agent advised that this was the certificate they had sight of when marketing the property to let. It was therefore clear that there was an EPC for the property at the time of the letting.

However, at the assessment in August 2019, the property was given an energy efficiency rating of F. As this was lower than the minimum permissible rating for the letting of a property under the MEES Regulations, the Ombudsman would have expected the letting agent to have checked first whether the property was registered as exempt. The Ombudsman did not consider that it was enough for the letting agent to take the word of the landlord, in-line with their obligations under the TPO Code.

The Ombudsman noted that property was registered for an exemption in October 2022. However, there was no indication that the property was registered as exempt at the point that it was marketed to let in 2021. The letting agent acknowledged that the property was not in fact registered for an exemption in 2021, contrary to their belief at th time.

Failure to verify

The Ombudsman was not satisfied that the letting agent carried out sufficient checks, as had these steps been taken they would have discovered that the property was not exempt. The letting agent should have declined to market the property until an EPC with an energy efficiency rating of E or higher had been obtained, or the property been exempted. This placed the landlord at risk of receiving a penalty notice from the local authority. This part of the complaint was supported.

Regarding the tenant, the agent had an obligation to bring all relevant material information relating to the property to the attention of the tenant, which the Ombudsman was satisfied that the agent did, including the fact that the property only had an EPC rating of F and had electric heating. Therefore, the tenant was aware that the property was inefficient to heat before making any transactional decision, so no compensation was awarded. The Code says:

“13c You must ensure that tenants are provided with relevant and appropriate documentation, statutory or otherwise, prior to their occupation of the property or commencement of the tenancy, whichever is the sooner.”

However, these obligations cover the situation where the agent is responsible for the entire tenancy including set-up and move-in process. The letting agent in this case explained that the landlord wished to carry out the move-in process himself, which was corroborated by the evidence provided. Therefore, this aspect of the complaint was not supported.

The post F or G – it’s flipping cold! appeared first on The Negotiator.

Rebecca Marsh

No contract was entered into between the agent and the seller and as such, the agent said the seller was not obliged to accept their offer. The seller felt that the agent’s approach was, in her view, dishonest and took advantage of her requirement to achieve a quick sale.

Investigation

Following an investigation, which involved listening to telephone conversations, the Ombudsman noted that the seller made the agent aware that a sale had fallen through, and she was looking to sell the property swiftly as she had an onward purchase to complete.

The agent’s approach, in her view, was dishonest and took advantage…

The agent confirmed they would be ‘the buyer’ and would offer 80 per cent of the market value. The seller confirmed the property had been valued by a surveyor at around £265,000 and in response, the agent advised that they would be looking at £200,000 to £210,000 as an offer.

It was confirmed that the agent would be seeking two independent estate agents to value the property and that they were independent to the agent. A follow up email was sent to confirm the facts discussed in the telephone conversation the same day.

One valuation took place but the second was delayed and then cancelled. The agent was informed by the third party responsible for sourcing and arranging valuations, that they were having difficulty getting a second agent to agree to provide a valuation.

The agent confirmed by text that they were organising a desktop valuation and the seller replied to ask whether the other report had been received. The agent confirmed that it had been received but the valuation was quite low at £220,000. The seller expressed her disappointment and the agent confirmed that as they could not help, they would close her file. A total of nine days elapsed between interest being submitted by the seller and the withdrawal of the agent’s willingness to purchase the property.

The seller expressed her concern that the agent identified themselves as cash buyers but believed they were acting as ‘middlemen’. As the process did not proceed beyond initial valuations and no contract was signed, there was no basis on which to dispute that the agent was intending on purchasing the property with cash themselves.

The valuation report provided three figures; a market value, an achievable value and a quick turnaround value. Given the valuation of a property relies on many factors in order to determine, the Ombudsman did not consider this practice to reflect an unethical or unfair approach. The agent’s approach to also use two independent agents to provide a value was also considered fair.

Quick turnaround

However, given the seller’s disclosure of the need for a swift sale in order to complete on her onward purchase, the Ombudsman would have expected the agent to make the seller aware that given the need for such a swift sale, their offer would not be based on the ‘open market’ value, but rather that of the ‘quick turnaround’ figure which was significantly less.

Accordingly, there was an expectation on the agent to inform the seller from the outset that their offer would be based on the lower ‘quick turnaround’ figure and the reason for this – that being that they would have to negate certain checks to achieve the quick sale the seller was seeking and thus meant increased risk for them.

By not informing the seller of this, the Ombudsman understood that the seller’s subsequent awareness of the three figures and, specifically the ‘quick turnaround’ figure, had led to the seller’s perception of the agent’s actions being dishonest and unfair.

Outcome

The Ombudsman noted that the agent’s shortcomings were not in keeping with 1d of the Code – to act with fairness, integrity, and best practice. Although it was noted that the stress experienced by the seller was inherent to her circumstances at that time – needing a quick sale to continue her onward purchase. This inherent stress also amplified the necessity for more transparency by the agent on the ‘quick turnaround’ figure from the outset. The Ombudsman supported the complaint on this basis and made an award of £200 in compensation.

The post A.I. high five image appeared first on The Negotiator.

The landlord was seeking a refund of the solicitor and court costs that he incurred to remove the tenant from his property following the build-up of rent arrears. The landlord considered that the agent failed in their service by recommending a product that was not suitable for him, and as a result he felt they were responsible for his financial losses.

The agent had apologised for any frustration the landlord may have experienced and acknowledged that their communication did not meet their usual high standard. However, the agent did not offer the landlord a gesture of goodwill leading to the case being escalated to TPO.

The landlord felt that he should be compensated for legal costs.

Investigation

This dispute stemmed from the landlord stating that he was frustrated that he was sold the No Deposit Option (NDO) which he subsequently believed was not suitable. He also felt that communication from the agent about the product and the tenant’s rent arrears was poor.

Rebecca Marsh

The Ombudsman noted that the landlord referred to incorrect information he was given about the NDO by the agent during telephone calls. The agent denied this and as the Ombudsman was not party to these conversations, she was unable to determine exactly what was said and therefore could not use this information in her decision.

However, a letter signed by the landlord stated:

“In the full understanding of the situation, the Landlord acknowledges and accepts that: The Proposed Tenant noted above is unable to satisfy the reference criteria of [agent] as detailed above:

1. The Premier Rent Guarantee Service will not be available for this Tenancy.
2. It has been approved for the No Deposit Option to go ahead on this Tenancy. In the full understanding of the situation the Landlord authorises [agent] to proceed with the letting of the Property to the proposed Tenant.”

Two days after signing, the landlord was sent an email from the agent which confirmed the Tenancy Agreement would include the NDO. The Ombudsman was therefore satisfied, based on the two events outlined above, that the landlord agreed to the NDO for the tenancy.

Paragraph 13o of the TPO Lettings Code states, “Where a deposit replacement product (e.g. such as insurance) is proposed in place of a traditional deposit, the potential advantages and disadvantages of the product must be explained in clear terms to the Tenant and the landlord and both party’s agreement sought before proceeding.”

From the evidence provided, the Ombudsman was not satisfied that the agent had demonstrated that they fully explained the potential advantages and disadvantages of the NDO product to the landlord before he agreed to allow the tenant to use this for the property deposit. This was because the agent had provided a document signed by the tenant that fully explained the NDO product, but no corresponding document was provided to the landlord to enable him to understand the important Terms and Conditions.

Whilst the Ombudsman concluded that this would have caused the landlord undue aggravation and inconvenience, she also took into consideration that the amount paid to the landlord from the NDO product was higher than the standard deposit amount that could have been legally held in a traditional deposit arrangement.

Concerning communication surrounding the rent arrears, Paragraph 14d of the Code states, “The agent must draw a landlord’s attention to a build-up of serious rental arrears and should seek appropriate instructions from the landlord or the landlord’s professional advisers.”

The landlord stated that once the tenant had stopped paying rent, he was always ringing the agent for an update, however they did not keep him informed of the situation. However, from the evidence provided, the Ombudsman was satisfied that the agent kept in touch with the landlord, the tenant and the guarantor during the period of the rent arrears.

That noted, it was observed that there were instances where the tenant had contacted the agent with promises of payments which did not appear to have been relayed to the landlord. Therefore, the Ombudsman considered the agent’s communication regarding the arrears could have been more frequent at times which would have alleviated some of the landlord’s frustrations and the feeling that he was not being kept informed.

Outcome

The landlord felt that he should be compensated for the court and solicitor costs he incurred due to the tenant not paying rent and the damages to the property. However, paying the rent and looking after the property are contractual obligations for the tenant, as outlined in the Tenancy Agreement. The agent could not fairly be held responsible for the failure of the tenant to comply with the Tenancy Agreement and therefore the Ombudsman did not conclude they were liable to cover the solicitor and courts costs claimed by the landlord.

However, the agent’s failure to provide the landlord with the terms and conditions of the NDO and their shortcomings in not always keeping the landlord up to date regarding rental payments, led the Ombudsman to find that an award of £150 was suitable as compensatory redress.

The post No deposit? No thanks… appeared first on The Negotiator.

Rebecca Marsh

The buyers explained that they were not aware of the existence of the planning application for the estate when they purchased the property and said they would not have offered £11,000 over the asking price had they been aware.

The search provider said that the planning application and decision for the new build estate was not included in their report because the application was made twelve years prior and their findings only included applications made during the seven year period up to the date of the search. They said that the search had a seven-year cut-off point, since most planning decisions stipulate that work must begin within either three or five years of approval being given. They explained that the planning decision in this case was unusual in that it did not specify a date by which time the work must begin.

An extreme example

The search provider felt this was an extreme example where the time lapse between the original application, appeal and subsequent works was much longer than expected and that the lack of time limit to commence works meant that there was little chance of their report picking it up.

The search provider explained that as no applications were identified within seven years prior to the report being generated, the report did not include a dynamic text field which would have advised the buyers that the search was limited to seven years. However, they acknowledged that this was not ideal and made a goodwill offer to refund the search fee of £137.16, in resolution of the complaint.

The buyers rejected the offer of compensation and sought compensation of £11,000, which is the amount they offered over the asking price of the property.

Investigation

The Ombudsman accepted that the search provider needed criteria to apply in order to determine the search parameters and considered that it was reasonable for the report to have a cut-off date before which planning applications would not be included. This would prevent out-of-date information from being routinely included in search reports and potentially obscuring more relevant information. The Ombudsman felt that seven years was a reasonable cut-off point, given the search provider’s comment that most applications contain the criteria that building must begin within either three or five years of approval being given.

Their findings only included planning applications made during a seven-year period…

The Ombudsman therefore did not conclude that the search provider failed to carry out the search accurately, within the parameters that were set. The application for the housing estate next to the property was made twelve years prior and approved ten years before the time period covered by the search. Although there was some activity in 2012, it was recorded under the existing record and did not generate a separate record. Therefore, the Ombudsman accepted why it was not picked up by the search.

Limitations of search

However, the Ombudsman explained that there was an expectation on the search provider to have put the buyers on notice of the fact the search only included applications during the last seven years. This expectation was in accordance with the requirement under the Search Code to state what sources of information had been searched, which reasonably included stating any limitations that were in place.

The report should have warned the buyers that there might have been applications which were ‘live’, but which had not been included because they pre-dated the time frame covered.

The search provider should also have advised the buyers to make their own enquiries if they had concerns about this possibility. The search provider said that there was a dynamic field which would have explained that the search was limited to seven years, but that it was not included since no applications were found within the last seven years. This was clearly unsatisfactory, since the buyers needed to be made aware of the limitations of the search, regardless of whether any applications had been identified or not. Had such a statement been included, the buyers might have been able to instruct their solicitor to carry out further investigations.

Outcome

The Ombudsman recognised their strong feelings towards the reasoning behind their decision to offer the amount they did. Nonetheless, the discovery of the application for development of a new build estate, which they would have reasonably expected to be included in their search report, undoubtedly caused them distress.

The Ombudsman therefore considered that there was a flaw in the way information was presented by the search provider, in particular the lack of warning that the search was limited to applications made within the last seven years, that there may have been applications that predated this time frame and that the buyers should have made their own enquiries to satisfy themselves on this point.

The Ombudsman made an award for compensation of £1,000 for the aggravation, distress and inconvenience caused.

The post Not in my back yard? appeared first on The Negotiator.

A. Service charge statement
B. Cleaning
C. Communal area touch-up/upkeep
D. Window cleaning
E. Communal greenery
F. Communication

Rebecca Marsh

The leaseholder was seeking a clear breakdown of service charge costs, better cleaning including the window cleaning, improvement of the condition of the communal areas and the communal greenery, and better communication from the managing agent. The managing agent did not believe that their service fell short in relation to any of the issues raised.

A. Service charge statement

The leaseholder was unhappy with some of the service charges within the statement and the clarity of the service charge document. The Ombudsman also made the observation that the charges made were in line with the lease provisions.

In relation to the clarity of the service charge document, it was noted that it was accompanied with a copy of the approved budget which the Ombudsman considered was sufficiently clear to understand the service charges. The Ombudsman did not support this complaint.

B.  Cleaning

The leaseholder was unhappy with cleanliness of the building, stating that there was constantly rubbish all over the development and specifically referring to dog faeces remaining outside of the entrance. However, no evidence was provided to show the uncleanliness was reported to the agent.

The Ombudsman explained to the leaseholder that it was reasonable for the agent to be provided with an opportunity to address concerns before they were escalated to TPO. The Ombudsman also noted that the agent had contacted the cleaning company following the matter being raised with TPO. Given the lack of evidence presented and the requirement to first raise issues with the agent, the Ombudsman did not support the complaint.

C.  Communal area touch-up/upkeep

The leaseholder complained that the internal communal areas were run down and dirty. In response the agent had advised that the communal areas would be touched up once the freeholder had left the site and in line with the lease agreement, the internal communal areas could be considered for redecoration every five years but that they would look into areas that may require a few touch ups earlier.

The managing agent did not believe that their service fell short.

The Ombudsman noted that the agent had taken into account the requirements of the lease and had offered a reasonable resolution. Accordingly, the Ombudsman did not support this complaint.

D.  Window cleaning

The leaseholder was unhappy with the quality of the window cleaning services. This was agreed by the freeholder as a bi-annual service and under a contract that was not due to be renewed for a period of time.

As the freeholder was responsible for negotiating the contract, the Ombudsman explained that the managing agent was not directly responsible for the service agreed. The agent had advised that they would look to change contractors when possible. The Ombudsman concluded the response was reasonable and did not support the complaint.

E.  Communal greenery

The leaseholder was unhappy with the plants in the communal areas stating they had been dead for a year and not replaced. Again, no evidence was provided by the leaseholder to support the claim. The agent had instructed the gardener to remove dead plants but would not be able to plant any more until the appropriate season and this would be included in a future service charge. The Ombudsman concluded they had acted appropriately and did not support the complaint.

F.  Communication

The leaseholder felt that communication between residents and the managing agent was very poor, and not enough was being done to share information with all the residents. The agent stated that they had introduced a live portal where residents could raise queries. This provided all leaseholders with the means to communicate with the agent and visa-versa. There was no evidence that any leaseholder had experienced problems accessing and using the portal or receiving the quarterly newsletter. Given these developments, the Ombudsman was satisfied that the agent’s communication with the leaseholders was sufficient and therefore did not support the complaint.

Outcome

For the reasons outlined, the Ombudsman did not support any of the complaints and therefore no award of compensation was made. Importantly, it was also explained to the leaseholder that if issues of concern occur the agent should always be given the opportunity to address those concerns and propose resolutions. In this case it was clear that the agent was willing and able to do so, had the leaseholder used the communication tools made available to her the by the agent.

The post The moaner leaser appeared first on The Negotiator.

The landlords said that the agent did not complete the appropriate referencing checks, which resulted in the tenants accruing rent arrears and causing damage to the property. The landlords said that the referencing process did not highlight historic and current debts when considering affordability of the monthly rental commitment. They placed the responsibility for the losses they incurred with the agent. The agent responded saying that they explained to the landlords the tenant’s circumstances and advised them that the tenants had passed the referencing procedures that were in place, and which were detailed in their terms of business.

Investigation

Under Paragraph 11b of the TPO Code of Practice for Residential Letting Agents (the Code), the agent was required to take references on the tenants appropriate to the circumstances of the application. This included proof of identification, residence, income and a credit check.

Rebecca Marsh

The agent’s referencing procedures should usually be by way of a referencing service provider and they were required to provide the landlords with all relevant facts relating to the application, to enable them to make an informed decision, regardless of whether the tenants had met, or failed to meet the referencing criteria. The Ombudsman could not hold the agent responsible for the actions of third parties, for example the tenants and the referencing provider, but considered the agent’s actions in relation to their obligations.

The Ombudsman could not hold the agent responsible for the actions of third parties.

The Ombudsman was provided with the reference report conducted on both tenants. This sought to consider the tenants’ financial ability to afford the property via residence check, credit check, employment check and, where relevant, a landlord reference. The report for the tenants stated that the overall decision was “Accept”. Therefore, in accordance with their obligations under Paragraph 11g of the Code, the agent was required to relay to the landlords the content of the report, and that the tenants had met the required referencing criteria.

The Ombudsman was critical of the agent’s record keeping, as she was unable to conclude with certainty the information they relayed to the landlords in relation to the referencing reports obtained, to show that they communicated all relevant facts (including two young children also occupying the property) to enable the landlords to make an informed decision about the tenants’ application.

The landlords stated that the referencing report did not highlight a mortgage which they say the tenants had at the time of their application. However, the referencing provider conducted a search against the applicants’ credit file and reported that no adverse information was identified – this included a search for County Court Judgements and the presence of a bankruptcy order.

The landlords also commented that no personal references were taken out on the tenants to show their character, but this is not a usual reference for an agent or referencing provider to obtain. Where a potential tenant is in rented accommodation at the time of referencing, a landlord reference should be obtained to check if the tenant has paid their rent on time and to ask the previous landlord how the property had been kept and if they would rent to the tenant again. In this case the application from the tenants indicated that they were living with friends or family which had been checked against the electoral roll.

Outcome

From the evidence provided, the Ombudsman was satisfied that the agent fully complied with their obligations under paragraphs 11b of the Code, in relation to the referencing they conducted. However, when considering their responsibilities under paragraph 11g of the Code, she was critical of their lack of record keeping to demonstrate that they informed the landlords of the content of the reference reports and that two young children would also be residing at the property.

The Ombudsman supported the complaint on this basis and considered that the shortcomings in service caused the landlords some avoidable inconvenience. However, the Ombudsman did not consider it to be fair or reasonable to direct the agent to reimburse the landlords for the rent arrears accrued during the tenancy.

An award of compensation of £50 was made, reflecting the shortcomings in record keeping that had caused a degree of inconvenience.

The post Good reference, bad tenants appeared first on The Negotiator.