The Property Ombudsman warns that agents will still have duty of care for tenants’ complaints after fee ban

The Property Ombudsman has warned that letting agents must not forget about their duty to tenants once the fee ban comes in.

Katrine Sporle was speaking at the ARLA Propertymark national conference where delegates had questioned why they should deal with tenant complaints if they are not getting paid by them.

Sporle said there would be no question that letting agents must remember their duty of care to tenants, and said that in many cases renters were complaining about not being taken seriously.

She said: “Complaints are rising. They are not going down. I’m not going out looking for complaints – they are rising because the size of the market is rising and people are more savvy. They expect a better service.

“Any agent who thinks you don’t have a duty of care to your tenant and therefore a tenant won’t complain under the ban, we won’t go there with you.

“We will be taking complaints from tenants.”

She told EYE that she would still have powers to award redress to tenants after the ban and that agents were wrong to think that just because there were no more fees, that this meant their duty of care had gone.

Meanwhile, giving a keynote speech at the conference, former Liberal Democrat leader and deputy prime minister Nick Clegg said he had opposed the Right to Rent scheme at the time of its launch and thought it would be stopped after its initial trial.

Another speaker, former Sainsbury’s boss Justin King, said the industry shouldn’t be so downbeat as there will still be plenty of demand due to immigration, the housing shortage and people wanting the flexibility of renting. He also said letting agents should still treat tenants as their clients.

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13 Comments

  1. smile please

    Sorry. If I cannot charge a tenant a single penny but do charge a landlord, I think it’s pretty obvious who I work for.

    I will be doing the bear minimum for tenants.

    All the things we do for free will be stopped.

    We will always side with the landlord as they are our client.

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    1. CountryLass

      Exactly, at the moment I tend to side with who I feel is right (or less wrong in some cases) but soon it’ll be Landlord all the way.
      Tenants will all be on periodic contracts, as the Landlord won’t want to pay an admin fee to get them renewed and I cant charge the Tenants for it. I don’t work for free.
       

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  2. ArthurHouse02

    By law we have to pay to be a member of an ombudsman scheme who is now basically saying that they will be encouraging tenants to make complaints etc. The fee ban and air of superiority by the likes of Shelter give tenants a sense of empowerment like never before. Agents should always try and do a good job, should always do their best, but when as employers, tax payers, someone who is providing a service, when is someone going to look after us at all?

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  3. Peter

    The law of agency should apply, more so if we cannot charge fees to tenants. So if a complaint is made to the ombudsman and an award is made, it should be the landlord who pays as what the agent did was done in the landlord’s name. The landlord will then need to see if what the agent did breached the T&C’s to see if there is recourse with the agent.

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  4. seenitall

    Peter I agree with you.

     

    I think the TPO is on dodgy legal ground here.

    There has to be some link, some contract, some mutal benefit for a relationship to exist in order its justifed for a tenant to complain about an agent.

    Im trying to think of any other business where someone doesnt pay anything to that business yet has the right complain to an all seeing eye who can make an award against that business?

    You have the normal law courts to right wrongs but there there has to be a direct link, a relationship, consideration.  There is no consideration passing between the tenant and the agent.    There is with the tenant and the landlord (law of agency)  but not with the agent as a seperate business.

     

    can anyone think of another relationship like this?  (yes marriage sprang to mind) but anyother?

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    1. CountryLass

      Police, ambulance, hospital? All though we all pay in the form of taxes, we arent really ‘customers’ in that sense of the word.

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    2. Peter

      seenitall, Law of Agency is not between tenant and landlord, it is between agent and landlord. There is no contract between tenant and agent, although charging fees to tenants does blur the lines a tad, but not enough in my view to create a situation where an agent is financially liable to a tenant due to a failure if the duty of care that an agent does have during a tenancy.
       
       

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  5. DASH94

    Doesn’t it rather depend on the nature of the complaint?   Wouldn’t the duty of care to the landlord and his interests extend to dealing with tenant complaints?

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  6. CountryLass

    I can see situations like the police face.. “I pay your wages!”

    Actually, no. The Landlord pays my wages. You pay me nothing, yet expect me to drop everything when a lightbulb goes, or a tap drips. You AREN’T my client, you are NOT my priority and whilst I will do everything I can to make sure that the property you rent is safe and suitable, I will always side with my client, as they are the ones I act for.

    “But… I pay rent! I’m your Tenant!”

    Yes, you pay rent to the Landlord, we take a percentage of that FROM THEM! The Landlord paid for my time, knowledge, experience and loyalty. You paid sweet FA.

    “Well, fine! I’ll hand my notice in!

    No skin off my nose mate, off you pop. Make sure the place is tip-top though, as the Inventory I did FOR THE LANDLORD shows the property was a show-home, so it you have even dented the carpet above fair wear and tear then you are in for it.

    (And no, I’m not one of the Agents who grossly overinflates deposit stoppages etc, I prefer to give the whole amount back to the Tenant. I am generous when deciding what fair wear and tear is, as at the moment the Landlord and Tenant split the cost of the inventory.)

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  7. TimSpinks52

    I am not a letting agent or a landlord but I am involved in the industry.

    I am concerned about how far the law and organisations such as TPO has swung in favour of individuals and against business. My concern is based on my belief that unfairness towards businesses destroys, certainly in the mid to long-term, the entrepreneurial attitude and consequently the innovation of a population and damages us as a nation. Why would anyone bother being entrepreneurial and opening a business when, using letting agency as an example, someone can rely on the law to the extent that the (made up) following sentence could actually be part of a real conversation “I haven’t bothered paying the rent but it’s ok my agent can’t evict me for ages because the Citizen’s Advice guy noticed that I signed the prescribed information 10 minutes before my landlord and legally they should sign it before me. I’ve also sued them for my deposit x 3 and got my original deposit back, so I’m free to smash the place up – even if they sue me for damage afterwards they’ll only be able to get an attachment to earnings for £10.00 a week”.

    When you think about it, that is ridiculous.

    The problem is that TPO is destined to be self-serving. If tenant fees are banned then letting agents will focus more on protecting the landlord and quite rightly so. At that point is it fair to assume that complaints to TPO from landlords will reduce and tenant complaints may rise?

    If it is then if TPO are to no longer uphold complaints from tenants then they become redundant, due to the reduced level of landlord complaints. The only way for TPO to remain relevant is to uphold complaints from tenants.

    I don’t subscribe to the idea that it is fair, proper or right that a tenant could effectively sue an agent for acting in the interest of a landlord when the landlord is paying the agent and the tenant is not. Would I sue the selling solicitor in a conveyancing transaction where I purchased the property? Of course not. If I had cause to I would seek redress from the solicitor who acted on my behalf.

    The tenant should be responsible for seeking their own legal advice (either free from CAB or paid for from a lawyer) about their rights and obligations under a tenancy agreement if they wish to have access to redress. The redress should then be via the organisation who provides membership to the business from whom the tenant took advice – in the case of a solicitor, the SRA and Law Society.

    Granted, TPO has a valuable role in ensuring that agents are doing what they should be doing, but why should an agent be doing anything for a tenant outside of fulfilling the landlord’s legal obligations? Even then some of the legislation appears to be designed to hinder landlords and letting agents rather than protect tenants.

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  8. JohnGell

    Folks do seem to struggle with this.

    Landlords owe a duty of care to tenants, and an agent (as the very name suggests) is acting on behalf of the landlord who pays him.  The agent must therefore fulfill that obligation on behalf of the landlord.

    Charging fees to tenants raises a conflict of interest.  Moreover, with tenants being something of a captive market once they’ve set their sights on their property of choice, the way is open to subsidise low landlord fees by high tenant ones, and we know where low landlord fees lead.

    Tenant fees in Scotland have been unlawful for decades, and we all get on fine with that.  Accept that change is coming, prepare for it and adapt.

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  9. Scottish_Mist42

    Can’t believe some of the comments on this page, and also at conference yesterday.

    Tenants could be your future clients.  They are also amongst those who will bang the drum loud if they receive a good service from you, and even louder if they get a bad one!

    As a Scottish agent we’ve lived with this for years.  So my advice is, suck it up.  If you stop providing a good service to tenants, it will be your business that suffers in the end.

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  10. Neill30

    In respect of the law, under tort, there does not have to be a contract between the person complaining, and the person that provided the service. Just that there is a service.  Scottish Mist 42 made a good comment, but regrettably many people here are very anti tenant. Treat your tenants with respect, and you will receive respect back. In does not matter who pays fees etc.

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