Landlords are being urged to establish exactly where legal responsibility sits when using a letting agent as the regulatory burden on the private rented sector increases.
Property management firm 1st Avenue warns that appointing an agent does not automatically remove a landlord’s exposure when compliance failures occur.
However, liability depends on the particular legal obligation and arrangements between the landlord and agent, with some responsibilities capable of being formally transferred.
The warning follows the introduction of new requirements under the Renters’ Rights Act, where breaches can attract civil penalties of up to £7,000 and more serious or repeated offences can result in penalties of up to £40,000 or prosecution.
COMPLIANCE RESPONSIBILITY
Government guidance confirms landlords can use letting agents to meet duties under the Renters’ Rights Act, while agents acting on their behalf can also be held liable for breaches.
Right to Rent provides an example of why landlords need to understand their contractual arrangements.
Responsibility for Right to Rent checks normally rests with the landlord, but can be transferred to a letting agent where the agent accepts responsibility in writing. In those circumstances, liability for civil penalties transfers to the agent.
Paul Endacott (main picture, inset) of 1st Avenue says: “For years, landlords mainly judged agents on what rent they could get and how quickly they could find a tenant.
“That’s just nowhere near enough anymore, because property management is becoming a compliance risk management job.”
EVIDENCE MATTERS
Endacott argues landlords should pay greater attention to agents’ compliance systems, record keeping and ability to demonstrate that required processes have been followed.
He says: “Right to rent checks, deposits, safety, licensing, legislation, more scrutiny from the local authority, and increasingly it’s the evidence you need to prove you’ve done everything properly.”
He adds: “The question isn’t just, can this agent let my property?
“It’s, if something goes wrong, can I trust my agent has done everything correctly and prove it? Because a weak managing agent isn’t just frustrating anymore, it’s a financial risk.”
