I went to a buy-to let-seminar last month run by one of my clients. The presenter opened the evening with a rather frightening statement. She said, “There are now 154 regulations that you need to comply with before you can move a new tenant into a property”. She then gave us five minutes to write down as many as we could think of, then invited us all to shout out our answers. I was astonished by how few regulations the audience came up with. They were supposed to be experienced investors. Some of them owned quite sizeable portfolios and yet most of them did not seem to understand even the basics of lettings law.

What I learned from observing this seminar was that most landlords do not have the expertise necessary to manage their own properties and I honestly believe that as professional agents, we have a duty to make them aware of this. However, in many businesses, 50 per cent or more of all landlords instruct their letting agents on a let-only basis. This means that they have no access to the legal advice that is necessary to ensure that their property is let out in a compliant way. The fines for breaking even the most minor rules can be absolutely terrifying and quite a few mistakes can now potentially lead to a prison sentence.

I am regarded as an ‘expert’ but with increasing legislation, I’m too  frightened to manage my own properties.

Many landlords’ starting point is that they want to pay you a few hundred pounds to find them a tenant. They do not want you to manage the property or to collect the rent or to get involved in preparing their property for the tenant to move in. They just want the minimal possible service for the minimum possible fee. But they are wrong and you need to have the courage to tell them this. You also need to make them aware of the appalling consequences that can follow even a minor mistake.

A CASE IN POINT

A recent article in The Sunday Times showed just how dangerous ignorance of the law can be. The writer moved an acquaintance into her property in South West London without taking up proper references. The tenant did not ever pay one penny in rent from the day that she moved into the property. When the landlord went to evict the tenant and claim the rent due, the tenant claimed that she had refused to pay the rent because the landlord had failed to carry out essential repairs to the property (despite the fact that it had just been refurbished).

Over the following year, the tenant made various other allegations about the landlord including a claim that she had harassed her for not paying the rent (by sending text messages) and that the eviction was illegal because she had failed to register with the local council as a licensed landlord. The dispute culminated in a counterclaim from the tenant for £9,000 to compensate her for the stress of the illegal eviction proceedings!

A good letting agent would never have allowed this to happen. They would have taken up proper references. They would have ensured that the landlord had the relevant licence from the local council before a tenant was allowed to move in. They would have prepared a detailed photographic inventory to prove that the property was refurbished and in good condition at the start of the tenancy. They would have kept a detailed log of the tenant’s maintenance requests and the action taken to address them. They would have chased the rent sooner and would have done so in a legal and professional manner. And finally, they would have offered the landlord a rent protection and eviction cost policy to cover them for their full losses if any of the above measures failed.

THE BOTTOM LINE

I have worked as an estate agent and management consultant in the property sector for thirty-seven years. I am described as an ‘expert’ but in view of ever increasing compliance legislation, I am now too frightened to manage my own properties.

Letting agents need the courage, the conviction and the training to persuade let-only landlords to switch to a managed or part-managed service. A number of my larger clients will no longer accept instructions from amateur landlords on a let-only basis and in my opinion, the sooner the rest of the industry follows this lead, the better.

Adam Walker is a management consultant, business sales agent and trainer who has worked in the property sector for more than twenty-five years.
www.adamjwalker.co.uk