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The case of the Covid cover charge

The Property Ombudsman, Rebecca Marsh, addresses a complaint about an agent deducting money from the rent to cover the costs of Covid.

Rebecca Marsh

Link to The Property Ombudsman


The landlord complained that £200 was being deducted from the monthly rent of her property for three months during the first lockdown, even though she had a guaranteed rent agreement. Despite the fact that the agent repaid the £600, the landlord said that it caused her financial hardship and significant stress.

  • The 2019 edition of the TPO Code of Practice was considered. For this case, the particular focus was on following paragraphs: 14a – to use legally acceptable methods to obtain prompt rental payments from tenants in accordance with their tenancy agreement and, when received, transfer those monies to the landlord promptly.
  • 18b – to keep clients’ money in a client money account with a bank or building society authorised by the Financial Conduct Authority.

On 2nd April 2020, the agent emailed all clients stating that due to the pandemic they would be “making the necessary adjustments to our usual process to enable us to continue to provide you a regular uninterrupted service.” They went on to explain that to enable them to guarantee rent to landlords they would be reducing rental guarantees by £200 per calendar month until a time where they could work normally. However, in the same email, the agent acknowledged that they had not suffered any loss of rental income.

Link to The Property Ombudsman

Rebecca Marsh

Rent for the landlord’s property was due on the 3rd of every month. This meant that the agent only provided her one day’s notice that her rental payment would be reduced that month. Whilst TPO was not made aware of the landlord’s mortgage payments, it was considered neither fair nor reasonable to provide the landlord with such little notice to make alternative financial arrangements to meet her commitments.

Rent was to be paid in accordance with a tenant agreement, a contract between a landlord and a tenant. Whilst it was clear that lockdown could have resulted in some tenants being unable to pay their rent, it appeared that the agent intended to use the rent they were receiving to potentially subsidise where rent was not being paid and/or supplement their own income stream.

Despite the agent repaying the £600, the landlord said that it caused her financial hardship and stress.

The Ombudsman was critical of the agent for reducing the landlord’s rental payments. By deducting funds in this way, the agent did not adhere to the requirements of Paragraph 18b of the Code. Their actions also went against their obligations under Paragraph 14a which required them to promptly transfer rent to the landlord. There was no evidence or indication that the tenant failed to pay the rent, and, in addition, the agent acknowledged that they were providing a guaranteed rent service so the whole amount should have been transferred over to the landlord.

Furthermore, the landlord relayed her dissatisfaction within 24 hours of the agent’s email announcing the rent reduction, yet they still proceeded despite having no contractual right. The agent failed to respond to the landlord and only replied after she raised a formal complaint.

The landlord sent a number of emails to the agent following each monthly deduction requesting a refund. There was no evidence indicating that the agent responded, and this resulted in the landlord contacting TPO. The agent then emailed confirming a refund.


The Ombudsman accepted that the deducted funds were returned to the landlord but was critical of the agent’s decision to deduct them in the first place, especially when the landlord made them aware so swiftly of her dissatisfaction and the financial difficulties it would have caused her. The Ombudsman was further critical of the fact that on a number of occasions the agent failed to issue a response to the landlord.

This complaint was therefore supported and an award of £250 was made to reflect the avoidable aggravation, distress and inconvenience caused by the agent’s actions.

May 4, 2021

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