Complaints about letting agents

Prospective tenants should obtain the name and address of the landlord even if they will only be dealing with the agency for the duration of the tenancy. This could be important if there are disputes concerning the deposit or repairs.

If a tenant pays rent through an agency or deals with an agency acting on behalf of the landlord, the agency has a duty to provide the landlord's details in writing within 21 days of it being requested.[1]

An agency that fails, without a reasonable excuse, to supply the information will be guilty of a criminal offence punishable by a fine. Where the landlord is a company, a further request should lead to the disclosure of the name and address of every director and the secretary of the landlord company.[2]

Local authorities have the power to prosecute agents for this offence. Tenants should contact the local authority's tenancy relations officer, if there is one, or its legal department.

The tenancy agreement should be signed by both the tenant and the landlord. Some prospective tenants sign agreements in good faith believing the agency to be the landlord but, in fact, the agent is acting on behalf of the landlord. In these cases the agency is itself liable under the tenancy agreement so that in the event of a dispute the tenant may sue the agency as if it were the landlord.

An agency can be authorised by the landlord to sign the tenancy agreement on their behalf, although the tenancy agreement must state it is an agreement between the landlord and the tenant. 

An agency may act without the authority of the landlord, either deliberately or accidentally. In these cases, the landlord is not liable for the agent's actions. For example, tenants may move into rented accommodation arranged via an agency and then shortly after the landlord orders them out of the property because the tenancy agreement was not signed with the landlord's authority and the landlord had no intention of granting a tenancy to that particular tenant.

If the agency only had permission to identify a prospective tenant, but subsequently arranged the tenancy without the agreement of the landlord, then the landlord is not bound by the contract entered into by the agent. The tenants could be forced to leave as they would be trespassers. If this happens, the tenant could argue that they had been misled into believing that the agency was acting on behalf of the landlord. This would give the tenant the right to seek damages against the agency.[3] The damages could cover the value of the tenancy lost, which may be the length of time that the tenant would have been expected to live in the property, and general damages for the distress and inconvenience.

The tenant may be able to negotiate with the landlord to agree a new tenancy, although the rent, terms and conditions would not necessarily be the same.

Under the Unfair Terms in Consumer Contracts Regulations 1999[4] and the Consumer Protection from Unfair Trading Regulations 2008[5] enforcement action may be taken against those running a business which is detrimental and unfair to consumers. The government has published guidance for lettings professionals to help them understand their responsibilities under consumer and business protection legislation when letting out domestic property.[6]

Agencies can also be prosecuted under the Trade Description Act 1968 if they make a false statement about the accommodation or its facilities.[7] However, prosecutions are rare and the agency may be able to argue that it was acting on the instructions of the landlord.

In most cases, the landlord is ultimately responsible for tackling disrepair. However, most agencies provide management services and usually have authority to arrange for repairs. Tenants who have little or no contact with the actual landlord should contact the agency to request a repair in the first instance. If the property is a flat and the landlord is a leaseholder, the freeholder may be responsible for repairs to common parts.

If the agency or landlord fails to carry out repairs within a reasonable time, the tenant can take court action to gain financial compensation for the inconvenience of living with the disrepair and an order from the court requiring the landlord to carry out the repair.

Most agencies acting on behalf of a landlord require payment of a tenancy deposit and rent in advance. In many cases, letting agencies take the deposit on behalf of the landlord and arrange for it to be protected in a tenancy deposit protection scheme. Tenants should get a receipt for any amount paid to the landlord or an agency.

The amount of rent in advance and/or deposit required can vary depending on the type of tenancy. From 1 June 2019, it is unlawful to ask for a tenancy deposit equivalent to more than five or six weeks’ rent (the cap depends on the total annual rent) in connection with assured shorthold tenancies and licences in the private sector.[8]

From 6 April 2007, assured shorthold tenancy deposits must be protected in a government-approved scheme.

There are rules on fees that landlords and letting agents can and cannot charge to tenants and other relevant persons, and most permitted payments  are subject to a cap.

The agency usually compiles an inventory of the property's contents at the start of a tenancy. The cost of any listed items that are damaged or lost during the tenancy could be deducted from the deposit at the end of the tenancy. Prospective tenants should check that the inventory is accurate and that any damaged item is included with a description of its condition.

If an agency does not provide an inventory, a tenant should create one themselves and have it signed by an independent witness.

An agent acting on behalf of the landlord can be found guilty of criminal harassment and/or illegal eviction (also called unlawful eviction). Illegal eviction occurs when a tenant is unlawfully deprived of all or part of their residence.[9] The eviction could be by force or by changing the locks while the tenant is out. Actions such as locking a toilet door or blocking access to a part of the accommodation that the tenant has the right to occupy also constitutes illegal eviction.

Tenants should contact the local authority tenancy relations officer or legal department if they believe they have been illegally evicted.

When letting or managing premises, an agent must not unlawfully discriminate against any person on the basis of any of their disability, race, sex, sexual orientation, gender reassignment, pregnancy or maternity, religion or beliefs.

From 1 October 2014, any letting agency or property management agency that is not exempt must belong to a government-approved redress scheme.[10] Where problems arise that are not resolved by the agency, a complaint can be made to the redress scheme it belongs to.

The schemes are The Property Ombudsman and the Property Redress Scheme.

Estate agents must be members of a government authorised consumer redress scheme.

Each redress scheme has its own terms of reference, codes and procedures which should be referred to when making a complaint to the scheme about one of its members.

Each redress scheme can provide a list of its members on request.

In a case involving an agency registered with The Property Ombudsman only for its residential sales and lettings work but not for its residential leasehold management work, the Upper Tribunal held that letting agency and property management were different types of work and that agencies engaged in both needed to ensure that they were covered by a redress scheme (or schemes) in respect of all the work they did.[11]

Duty to publicise membership of redress scheme

Agencies that are required to belong to a redress scheme must display and/or publish on their website:[12]

• a list of fees

• a statement indicating membership of a redress scheme

• the name of the redress scheme belonged to

Information about the chosen redress scheme should be provided when a lettings agency enters into an agreement with its customers.

Enforcement

Each local authority has the responsibility to enforce the requirement to be a member of a redress scheme on the agencies in its area and can impose a fine for non-compliance.[13]

The National Approved Letting Scheme (NALS) Effective Enforcement Toolkit has a step-by-step guide for local authorities on the legal process to follow when taking enforcement action against non-compliant agents.

There is no requirement for a letting agency to belong to a redress scheme if the:[14]

• purpose of its work is only to facilitate a direct transaction between a prospective landlord and prospective tenant

• letting work is carried out by a local authority

• tenancy is offered by a housing association/private registered provider of social housing

• tenancy offered is a long lease

• accommodation is arranged by an employer for an employee

• prospective tenant provides work or services to the person arranging the letting

• lettings are arranged by an educational institution[15]

• lettings are arranged by someone providing legal advice in connection with resolving a legal dispute[16]

There is no requirement for a property management agency to belong to a redress scheme if the:[17]

• management work relates to a hall of residence owned or managed by an educational institution or charity, and occupied wholly or mainly by students

• premises managed are used wholly or mainly to provide accommodation for people fleeing violence or abuse, on a non-commercial basis

In addition, there is no requirement to belong to a redress scheme where property management work is carried out:[18]

• at the request of a local authority or other social landlord

• by a 'right to manage' (RTM) company, a local authority or a mortgage lender

The First-tier Tribunal has held (in a non-binding decision) that a business ('R') which sublet properties which it had leased from a superior landlord – guaranteeing the superior landlord a certain rent and retaining the difference – was not required to belong to a redress scheme. The Tribunal agreed that any services, repairs, maintenance or improvements that R carried out, or insurance that R arranged at the sublet properties (the activities which generally define property management) was in consequence of its own obligations. Because such activities were not at the direction of a third party, they did not qualify as property management work for the purposes of the requirement to belong to a redress scheme.[19]

Redress schemes do not charge a fee to investigate complaints against their members. Each scheme provides details of the types of complaint and the procedure for dealing with them. A complaint is not usually investigated until the agent has been given a reasonable opportunity (up to eight weeks) to resolve it.

Examples of complaints that can be made against a lettings/property management agency include:

• avoidable delays

• failure to follow procedures to which the agent subscribes

• rudeness

• not explaining things

• poor service or incompetence

• use of hidden fees

• charging and refusing to return a prohibited fee[20]

Complaints about tenancy deposits should be referred to the relevant tenancy deposit protection scheme or to the courts.

The redress scheme can require the agent to provide these types of redress:[21]

• the provision of an apology or explanation

• compensation up to £25,000

• other action deemed in the interest of the complainant as decided by the scheme

Once the complainant accepts the offer of redress, the agent must comply within a set time limit.

If the redress scheme's decision is rejected, the complainant loses the right to the redress offered. They may still use other options such as taking legal action in court. Where an agency fails to comply with a redress scheme decision, the scheme may impose sanctions including a penalty fine or termination of its membership.