Tessa's Ten Top Tips for landlords on choosing a letting agent
Try to chose a letting agent who is a member of the National Approved Letting Scheme, or one of the professional bodies that support it. These are:-
- The Association of Residential Letting Agents (ARLA)
- The Royal Institution of Chartered Surveyors (RICS)
- The National Association of Estate Agents (NAEA).
It is also a good idea to check whether they are registered with the Property Ombudsman.
- Decide what you want the agents to do - do you just want them to find a tenant for you, or do you want them to manage the property while it is let? If you want them to manage the property, the points below are important.
- Check that the agent has professional indemnity insurance which will cover them against the chance of being sued, and that they have client money protection in place (note that if the agent runs off with the tenancy deposit, you will still be responsible for repaying this to the tenant, and if he runs of with the rent, you can't ask the tenant to pay this to you again).
- Consider whether you want the agent to deal with tenancy deposit protection and discuss the arrangements with them. If the agent is to deal with this, check which scheme they are covered by. It might also be worth checking that the deposit is actually protected, as you are responsible if they do not do this.
Check the management contract very carefully. If there are sections you do not understand, take advice before signing. In particular watch out for the following:
- clauses which make landlords give six months notice or more if they wish to cancel the agreement. Three months is suggested as a reasonable cancellation period
- Clauses which provide for the agent to be paid commission on renewals of the tenancy with the tenants found by them, whether or not they are actually managing the property (some of these clauses may be invalid)
- charges for when the property is vacant - the agent is entitled to a fee but it should be less that that charged when a tenant is in place
- estate agency fees - this type of clause provides for the agent to get an estate agents fee, typically 1.5 percent plus VAT, if the property is put up for sale and is bought by the tenant - whether or not the letting agent acts as estate agent for the sale (again this clause may now be considered invalid)
- administration charges when new tenants go in - these charges are normal but make sure you know what they are and are happy to pay them
- charges for services such as inventories, tenancy agreements, telephone calls abroad. Again charges for these services are normal but check that you are happy with the fees to be charged.
- Check that the letting agent is responsible for arranging the annual gas safety checks and keeping all the necessary records
- Make sure that the agent will check that your property meets all other standards, for example that any furniture and fittings (including electrical fittings) comply with the regulations, and that if appropriate your property complies with the HMO regulations including licensing.
- Ensure that they will deal with queries from the tenants and arrange for routine repairs and maintenance. They should be authorised to spend up to a specified limit on this.
- If there are several agents who appear equally competent, consider choosing the one who has been in the area longest - they will probably have more local knowledge which is very important, eg for setting rents
- Keep copies of all correspondence with your agent (particularly those which make any special requests regarding the management of your property) and a copy of the management contract and any other paperwork.