Is Your Edinburgh Letting Agent Right For You?
Choosing the best letting agent to manage your property can feel like an impossible task; you need an agent who you can trust to maintain your most valuable asset, who will also provide a high level of service to your tenants. You will most likely spend a considerable amount of time scrolling through websites and online reviews, before meeting several potential agents, and finally selecting the one who best meets your requirements. But what do you do when your carefully chosen letting agent lets you down?
Changes to the PRS in Scotland
Since 1st October 2018, all letting agents operating in Scotland must be registered on the Scottish Letting Agent Register; any agents who have not done so are breaking the law. In order to be approved to join the register, letting agents must be able to prove that they meet all of the criteria set out in the Letting Agent Code of Practice, creating a more professional and progressive industry. Although this has been a positive change for landlords and tenants, 2018 was a busy year for letting agents as they rushed to update and amend their processes to ensure the minimum criteria were met.
For some letting agents – Clan Gordon included – minimal changes were required to meet the criteria, however, many needed a major overhaul to bring their business up to standard. Unfortunately, this has meant that some letting agents, who were unable or unwilling to meet the criteria, have gone out of business in recent months, a trend that is likely to continue for some time. So, what do you do if your letting agent goes bust?
What should happen
In the majority of cases, if your letting agent is going out of business, they will sell their portfolio to another local agent. Both you and your tenants should be informed well in advance who the new agent will be, what will happen during the changeover, and when exactly the changeover will take place. In this situation, everything will be handled by the new agent and you should be kept informed throughout.
If you are not happy with the management of your property being passed to the new agent, you can collect the keys and paperwork and either manage the property yourself or appoint another agent. Be sure to check that you have been given:
- All sets of keys
- Original tenancy paperwork (lease, inventory)
- Safety certificates
- Contact details for all tenants
Unfortunately, it doesn’t always work like this. If a letting agent has gone into liquidation, for example, there could be no warning at all for landlords and tenants. For some landlords, the first sign that something is wrong is a missing rent payment or phone calls and emails going unanswered. This situation, where there is no communication from your letting agent, can be extremely worrying for both landlords and tenants. It is important to act quickly to ensure that your property and your tenants remain protected.
What to do if your letting agent lets you down.
1. Check if your letting agent is registered
If your letting agent has unexpectedly gone bust – or if you are experiencing any other issue relating to their conduct – your first step is to check if they are on the Scottish Letting Agent Register. You can do this by simply entering the company name or letting agent registration number here. If your agent is not showing on the database, it could be that their application is still in process. You can find out if this is the case by contacting the Scottish Government directly.
If your agent is registered and you cannot get a response from them - you can get in touch with the First Tier Tribunal (Housing and Property Chamber) for advice on how to proceed.
If your agent is not registered (and their registration application is not pending), check if they are affiliated with any other industry governing bodies – such as ARLA or RICS – this will be a good starting point to gaining some insight into the situation and will mean they have client money protection.
2. Contact your tenants
When your letting agent ceases operating, it is important to make contact with your tenants as quickly as possible. Writing a letter is the easiest way to do this if you don’t have their contact details. You should instruct your tenants not to make any further rent payments to the agent.
If the agent has been out of contact for some time it is likely your tenants will have some maintenance issues that require action from you. It is important to remember that, as the landlord, you are ultimately responsible for the property and have legal obligations to your tenants, regardless of what is going on with the agent. Check that all legal requirements previously handled by your agent – such as HMO licence and safety certificates – are up to date.
3. Check the deposit is protected
The next step is to check that your tenants deposit is protected in one of the government approved tenancy deposit schemes.
You can contact each of the schemes directly to check if the deposit is with them; you will need the full address of the property, the tenants surname and the start date of the tenancy.
If the deposit is not protected in any of the approved schemes, you will be responsible for reimbursing the tenants if the funds cannot be recovered from the letting agent.
4. Get in touch with the liquidator
When a company goes into liquidation, a liquidator is appointed to manage the winding down of the business. You can find out who the liquidator is by searching on The Gazette. The liquidator will be able to give you guidance on what your next steps should be.
Unfortunately, these situations are becoming more and more common, with agents closing down or going bust without providing warning to their landlord and tenant clients. At Clan Gordon, we are experienced in helping landlords get their investment back on track. Contact us if you have been let down by your Edinburgh letting agent and require professional advice on how to move forward with your investment property.