A case that The Property Ombudsman (TPO) was asked to review came from a landlord, concerning the agent having let the property to someone other than the tenant who had been referenced and had signed the tenancy agreement. The letting agent also failed to pass on rent to the landlord.
The landlord had instructed the agent to provide a tenant find service. The agent advised that they had found a potential tenant and proceeded to carry out referencing checks. A few weeks later, the landlord was informed that the tenant had passed referencing and she received a copy of the report.
The agent prepared an Assured Shorthold Tenancy Agreement for an initial fixed term of six months at a monthly rent of £1,400. The tenant was required to pay a security deposit, which was to be registered with a deposit protection scheme. He was also required to pay one month’s rent in advance and pay rent monthly in advance thereafter. The agreement was sent to the agent for the tenant to sign it electronically.
At the request of the landlord, the agent emailed the tenant and advised that rent should be paid directly to the landlord. The tenant replied stating that he was setting up a standing order. It was unclear what happened after this, but it appeared that after signing the agreement the tenant decided not to proceed and instead another tenant started occupying the property.
Over a month later, the landlord phoned the agent asking why she had not received any rent and asked for the tenants’ contact details. The agent informed her at this time that the tenant had complained about works that needed to be carried out at the property. On the same day, the landlord emailed the tenant to ask for access to the property to attend to maintenance issues.
Having received no response from the tenant, and no payment of rent, the landlord emailed the agent again to find out if they were receiving rent instead, prior to considering commencing legal proceedings against the tenant for possession. The tenant was copied into the email. The agent said that the landlord was aware of the change of tenant, which she refuted, saying she only found out when she visited the property. When the landlord visited the property, the new tenant showed evidence that he had made a payment to the agent comprising one month’s rent and his deposit.
The agent fails to co-operate
The Ombudsman’s investigation was hindered by the agent’s failure to provide a company file and submission letter in response to the complaint, in accordance with their obligations under Paragraph 1i of the Code. Findings were therefore based on the information provided by the landlord.
The landlord provided a copy of the application form that was given to her by the new tenant when she visited the property. According to the form, the tenant applied through the agent and paid a holding deposit. This indicated that the agent let the property to the new tenant and they were therefore aware that he was occupying the property.
The Ombudsman’s investigation was hindered by the agent’s failure to provide a company file.
The Ombudsman to consider if the landlord was aware that the tenant had been replaced at any point prior to her visit to the property. It was noted that the landlord asked the agent to remind the original tenant that rent was to be paid directly to her and later to ask for access to the property. This indicated that she was not aware that a different tenant occupied the property.
The Ombudsman was critical of the agent for not informing the landlord that the original tenant had withdrawn and for not seeking instructions with regard to re-letting to another tenant.
There was no evidence that the new tenant had been referenced. It did not appear that he had signed a tenancy agreement or that his deposit was registered with a tenancy deposit protection scheme. The Ombudsman was therefore also critical of the agent for allowing him to occupy the property.
The Ombudsman supported the complaint and made an award
A compensatory award of £2,408 was made. This reflected the avoidable aggravation, distress and inconvenience caused and one month’s rent that was paid by the new tenant but not passed on to her. The award also included a refund of the letting fee charged by the agent, as the Ombudsman did not consider that the agent could reasonably justify their entitlement to the fee, in view of the significant shortcomings identified.