Reasons why landlords should use a letting agent
Many private landlords let their property very successfully without any help at all from a professional letting agent. Landlords who have the time to manage their properties themselves often save money on fees and commission and control of all aspects of the let. It is, however, extremely easy for errors to be made. Ensuring you are up to date with all legislation, creating the correct paperwork (and serving it in the correct order), dealing with deposits, taking effective references and so on, is not always as easy as you think and all of which can leave the landlord open to problems and potentially expensive mistakes.
A good example of a potentially expensive mistake is the registration of deposits into a legitimate Tenant Deposit Scheme (TDS). According to recent figures, the number of registered deposits is less than half registered landlords - in other words, even if some of the landlords have not taken a deposit from their tenants, there is a significant number who have not covered themselves by making the transfer to a TDS. In a recent case, Fraser and Pease v Meehan, at Edinburgh's Crown Court the landlord had failed to lodge the deposit with the scheme or provide the prescribed information. The Landlord claimed not to have been aware of the new regulations but the court awarded the tenant £3,450, three times the initial deposit amount! Should this landlord have used a decent letting agent, one would assume he would not be in this position.
What to look for in an agent
Before signing up with an agent, it is important to ensure they are the correct 'fit' for you. Make sure that they are a member of a professional body, such as SAL or ARLA. That way you will know that they are bound by a code of conduct and they will have provided proof that they have professional indemnity insurance and will keep client money separate from their own. Also, ask for references from current clients and contact details, rather than relying on glossy brochures or website testimonials which can't be checked. Make sure you ask questions, establish what fees you will be liable for and don't forget to check the small print, although a decent agent should make sure the costs are transparent. Finally, ensure that you get on with the agent and that you trust them to look after your property moving forward allowing you to develop a good business relationship.
There are numerous reasons why Landlords would be better off using a Letting Agent but below are my top six:
- Advice - Letting agents are a good source of sound advice about renting your property from maximising rent to legal issues to property décor. They will have a great deal of experience and will be able to advise on any number of aspects of letting a property and dealing with issues during a tenancy.
- Legal - There are numerous pitfalls when putting together a tenancy. An agent will ensure that all is done properly, ensuring you are not exposed to undue risk. They will keep on top of all changes to legislation which, even well informed, landlords sometimes struggle to do.
- Time & Stress - Letting property, dealing with tenants, viewings, paperwork - they are all very time consuming (and potentially stressful, especially if things go wrong). If you are time poor, clearly this is going to be a very good reason to use an agent.
- Maintenance - Letting agents or management companies will have a good access to quality tradesmen who can deal with issues quickly and efficiently.
- Control - Just because a landlord is using a letting agent does not mean that they have to relinquish control. Most agents (especially smaller outfits) will allow owners to be as hands on as they want to be and will always run decisions past landlords before proceeding with anything major.
- Finally - Letting agent fees and commission can be offset against tax.