Property agent regulation could be a blessing for Homesure, and for other reputable property agents like us. It has the potential to level the playing field, make it easier for landlords to trust the agents they hire, and close off an avenue that is currently enabling rogue landlords cut corners.
In our opinion, if local authorities want to catch problem landlords they should start by regulating the agents. In this post we’ll explain the reasons why, and how regulation could support good landlords.
It’s time to level the playing field for property agents
At Homesure Property, we’re voluntarily heavily regulated. A landlord is taking a risk when they hand management of their asset to an agent, so we want to provide them with plenty of proof and assurances that we’re ethical and trustworthy. Right now, nobody is holding us to these high standards except us.
Our prices are competitive. If we charge a higher price than another agent, it’s because that’s the rate we need to charge in order to do things well. Not all agents are so fastidious. In fact, it’s the Wild West out there. Good people are getting ripped off. Landlords and tenants are losing out.
Hiring the lowest priced property manager could cost you dearly
In the eyes of the law, a landlord is always responsible for their property, even if that property is being managed by an agent. If the agent doesn’t register your tenant’s deposit, as the landlord, you get fined. If your agent misses some important aspect of the move-in paperwork, you could find yourself unable to evict a problem tenant down the line.
So how do you, as a landlord, go about choosing an agent in an unregulated industry? It’s ideal to have a recommendation from another landlord you trust (that’s where most of our business comes from). If you don’t have that, look to independent review sites to get a sense of an agent’s track record. But testimonials are no guarantee. Things change. Landlords who are willing to pay for good property management deserve a better way that trial and error, to separate the good agents from the ones that will leave them high and dry.
We get a lot of business from good landlords who have fallen foul of terrible agents. They’ve paid out for property management then paid again for damages, or lost out on unpaid rent. Too many times, we’ve seen well meaning landlords facing financial hardship because of bad property managers.
Property agent regulation would provide an extra layer of security for landlords, that the service they’re paying for is the service they actually receive. Right now, for example, it’s hard to catch agents who don’t have client money protection. Fines like this one reported by Property Industry Eye are rare enough to make the news. Make all agents prove that they have it. Ones with nothing to hide will have nothing to fear.
Property agent regulation would do more to catch rouge landlords than landlord licencing
Landlords who want to cut corners like to hide behind agents. They know they have no intention of prioritising tenant welfare, of completing repairs, or of answering the phone to tenants when things go wrong. So they have intention of giving tenants any way to get hold of them direct. They hire a middle man.
We’re not guessing here; we’ve lost business to unscrupulous agents willing to turn a blind eye to bad practice on behalf of the landlords that pay them. And we don’t mind. It’s business we definitely didn’t want.
Even with landlord licencing here in Liverpool, it’s pretty hard to find the rogue landlords. Agents are easier to find. And if you find yourself a dodgy letting agent, chances are you’ll find multiple dodgy landlords at the same time.
Licence agents instead of landlords
If you’re using Homesure, you’re paying a significant amount each year to have your portfolio managed well. We don’t think you should get stung again with a landlord licencing fee.
Instead, the council could regularly inspect a random selection of the properties we manage. If they inspected 10% percent of our portfolio, they’d see how we do things. They wouldn’t need to inspect the rest. If they inspected 10% of another agent’s properties and found them to be in terrible condition, well then they act to make improvements across the board.
The shoulds and should nots of property agent regulation
It should be easier for landlords to separate good property agents from bad ones, and make a decision about who to hire from a level playing field. Rogue landlords shouldn’t have the easy option of hiring rogue agents to hide behind.
Done well, regulating the agents could go a long way to solving both of these problems. And (as long as the regulators don’t decide to hit us with unnecessarily high fees) we’re all for it!
What do you think?
Other people in our industry support regulation as well. Read Propertymark’s position on the issue in this related article.
