The Property Ombudsman’s proposed decision has gone against a letting agency after concluding that it had transferred a landlord’s student HMO into a rent-to-rent arrangement without his knowledge or consent.

The i Paper reports that Kusal Ariyawansa, from Manchester, complained after discovering his six-bedroom student property in Liverpool had been handed to a third-party company by Student Haus, part of the Mistoria Group.

The change in occupancy type invalidated the insurance, potentially leaving him without cover if damage occurred.”

The agency, it said, had “incorrectly signed a contract” on the landlord’s behalf and allowed another company to take over management of the property without his prior authority.

The Ombudsman said the arrangement exposed the landlord to risk because the property was insured for student occupation. It added that the change in occupancy type invalidated the insurance, potentially leaving him without cover if damage occurred.

It also upheld complaints about repairs and pest-control issues, finding utility charges had been applied during void periods and that the agency had charged a 9% management fee rather than the agreed 8%.

A provisional award of £700 compensation was proposed, comprising £250 for the rent-to-rent arrangement, £150 relating to utility charges and £300 for management failures. The landlord also received a £1,288.13 credit after the agency accepted that some utility deductions had been applied incorrectly.

Ariyawansa said: “Finding out a contract had been signed on my behalf without my permission was shocking and unbelievable.”

Strengthened controls

A proposed decision is a preliminary assessment by The Property Ombudsman and is subject to review before a final decision is made.

Mistoria Group said it is disputing it, and its Chief Executive, Mish Liyanage, told The Negotiator: “This is not a decided case. The Ombudsman’s decision is proposed, not final, and the complaint remains open and under active review; on 19 June, the Ombudsman asked us for the management contract, with a 25 June deadline.

The Ombudsman’s decision is proposed, not final, and the complaint remains open and under active review.”

“It was reached without our file or representations, which we have now provided, asking the Ombudsman to reconsider. We acted for this landlord and his property for around fourteen years on a concessionary fee, corrected a utility charge and credited him, and recovered his arrears without deducting our costs.

“We take standards seriously and have strengthened our controls. We will act on any constructive findings made.”