Letting Agent - Responsibilities and Risk*

Since 1 October 2014, letting agents and property managers in England must legally join a government-approved redress scheme. PIMS does not believe experienced agents need a basic explanation of that obligation, but they do need to understand the operational impact of complaint scrutiny.

Complaints are often assessed by looking at fairness, communication, transparency, records, response times and whether the agent followed a reasonable procedure.

• Was the tenant’s concern acknowledged?
• Was the landlord told promptly?
• Were repair reports logged?
• Were contractor instructions recorded?
• Were inspection findings documented?
• Was advice to the landlord confirmed in writing?

PIMS regularly sees claims where a tenant alleges injury or loss and later argues that the agent should have identified a risk during an inspection. These claims can arise months or years after the event.

A typical example is a tenant alleging they tripped on a garden flagstone. The tenant may sue the landlord first, then later pursue the agent arguing that the agent failed to identify the risk during a prior inspection.

• Was there a detailed inventory or video record at the start of the tenancy?
• Was there evidence the property was fit for habitation at commencement?
• Were garden, patio or external areas photographed during inspection?
• Did the tenant sign or confirm there were no known problems?
• Was there a clear repair reporting procedure?
• Was the alleged defect ever reported before the incident?

Where a claim or solicitor’s letter is received, the agent should read their professional indemnity policy and notify insurers within the policy timescales. Some policies require early notification of circumstances that may give rise to a claim.

• Do not delay notification while trying to resolve matters informally.
• Read the notification clause carefully.
• Keep copies of the claim letter and all related correspondence.
• Avoid admissions of liability without insurer approval.
• Ask insurers what steps they want the agency to take next.

Agents sometimes focus only on the tenant’s claim. PIMS believes agents should also consider the second layer of exposure: the landlord’s insurer may settle with the tenant and then consider whether to recover the loss from the agent.

The allegation may be that the landlord suffered loss because the agent failed to perform inspections properly, failed to identify a risk, failed to recommend repairs or failed to communicate clearly.

• The tenant may pursue the landlord.
• The landlord’s insurer may settle commercially.
• The insurer may then look at whether the agent contributed to the loss.
• The agent may face a complaint, claim or indemnity dispute.

Repairs and property condition issues can quickly become complaints, disrepair allegations or counterclaims. Agents need to understand that a repair issue is not just a maintenance task; it may become evidence in a future dispute.

• Log tenant reports clearly.
• Tell the landlord promptly.
• Record landlord instructions or refusal.
• Keep contractor correspondence.
• Photograph significant issues where appropriate.
• Escalate safety or urgent matters.

Agents may be asked to manage properties where the landlord insists on using their own gas engineer, electrician, builder or maintenance contractor. That can work, but it can also create serious operational exposure.

• Who is responsible for chasing appointments?
• Who checks certificates are received?
• Who deals with access failure?
• Who records contractor delay?
• Who is blamed if compliance documents are late?

PIMS believes agents should distinguish between agent-managed contractors and landlord-appointed contractors. If the landlord chooses their own contractor, the agent should be clear about what they will and will not manage.

A common problem occurs where the landlord bypasses the agent and communicates directly with the tenant, contractor or neighbour. This can undermine the agent’s process and create confusion.

Examples include the landlord issuing their own warning letters, threatening possession, refusing access arrangements, cancelling repairs or discussing deductions directly with the tenant.

• The tenant may become hostile.
• Access may be refused.
• Repair issues may escalate.
• The agent may lose control of the evidence trail.
• The agent may later be blamed for outcomes they did not control.

PIMS believes agents should make clear that landlord cooperation and disciplined communication are part of safe management.

A clear tenant reporting procedure is one of the simplest forms of operational protection. If the tenant knows how to report repairs but fails to do so, that may become important evidence later.

• Tell tenants how to report repairs.
• Keep written evidence of the reporting procedure.
• Encourage tenants to confirm issues in writing.
• Record inspection feedback.
• Consider tenant sign-off where no issues are raised.

PIMS believes agents should increasingly consider photographic or video evidence as part of routine operational defensibility. This is especially important for property condition, gardens, external areas, stairways, flooring, bathrooms and areas where injury or disrepair allegations may arise.

• Video inventory at commencement.
• Clear dated inspection photographs.
• Evidence of external areas where practical.
• Records of tenant comments or lack of complaint.
• Inspection notes that identify what was actually checked.

A short inspection note saying “property appears fine” may be far weaker than dated photographs, targeted comments and evidence of tenant communication.

PIMS believes experienced agents and agency owners constantly make risk/reward decisions. Some instructions, landlords or disputes consume disproportionate time, create complaint exposure and produce little commercial return.

• How much staff time is being consumed?
• Is the landlord cooperating?
• Is the tenant becoming increasingly hostile?
• Is the evidence weak?
• Is the agency carrying risk without being paid for the work?
• Is continued involvement commercially worthwhile?

Agents should be willing to consider disengagement where continuing to manage creates unreasonable operational, complaint or regulatory exposure.

This may arise where the landlord refuses repairs, hides material facts, bypasses management procedures, insists on unsupported deductions, prevents compliance, or ignores professional advice.

• Confirm the reason for disengagement in writing.
• Maintain a professional tone.
• Provide an orderly handover where possible.
• Transfer records and keys appropriately.
• Notify tenants where required.
• Record the agent’s advice and reasons.

Disengagement should not be emotional. It should be controlled, evidenced and commercially reasoned.