An agent has been hit with a court bill for over £12,000 after being convicted of failing to carry out repairs and maintenance on a property rented to seven students.
IPS (Leicester) had denied being the managing agent, saying they were simply rent collectors.
IPS, which charges flat fees for sales, says on its site that it offers three packages for landlords – let-only, rent collection, and a guaranteed rent package by which landlords let their properties to IPS for three to five years in return for agreed monthly rent.
IPS pleaded not guilty to seven charges relating to the student HMO.
However, after a two-day hearing brought by Leicester City Council, it was fined £750 per charge plus £7,000 costs and a £75 victim surcharge.
Nicki Agalamanyi, for the council, said IPS was managing agent for the house, taking 10% of the rent it collected, and was responsible for dealing with maintenance and repairs.
She said problems included a damaged fire door, a faulty lock on the front door, one non-working shower and another that was blocked, and cracked window frames which let water in.
She said: “Despite the complaints to the company, nothing was done.”
The council sent photographs to both the agents and the landlord Dr Obas Ebohon, who was subsequently fined for failing to have an HMO licence.
Of IPS’s claim that it was not the managing agent for the property in question, she added: “It is rather strange that (Dr Ebohon) should agree to pay a company 10% just to collect rents and nothing else – no management involved.”
Two tenants said they had been told to notify IPS if any repairs or maintenance were needed.
More in the Leicester Mercury here
Comments (8)
The court case took 2 days. In the first hour a contract should have shown that the agent was not managing and simply introducing/advertising and rental collection.
Poor T&C’s simply meant the agency had a harder job fighting their corner. Ran up greater costs. Time for new T&C’s and compliance.
This is exactly why we don’t bother with a rent collection option for landlords.
We either just find a tenant, or we manage the property. Anything in between tends to get very muddy very quickly.
Seems like the agent had it coming. You can’t expect to trade with no clear terms of business and turn a blind eye to unlicensed properties and think all will be well.
Should have had a terms of business between landlord and agent, that would make things clearer. HMO terms of licence scheme can make the agent liable as the landlord was not licensed!
Of IPS’s claim that it was not the managing agent for the property in question, she added: “It is rather strange that (Dr Ebohon) should agree to pay a company 10% just to collect rents and nothing else – no management involved.”
Well it’s usually far more involved than just collecting rent to provide a Let and Rent Collection service, but what on earth is strange about paying 10% for this service???????????????
And quite common for I’ll-manage-it-myself landlords to tell the tenant “any problems, just contact the agent, they’ll let me know”.
As seenitall says, difficult to form a view without knowing all the facts of the case, but right now I’m thinking an agent has been picked on rather unfairly….
My sense of schadenfreude at seeing one of my competitors get fined a big wad of cash disappeared once I read the details.
Firstly, even when the property is fully managed the agent does not have carte blanche to carry out repairs. Apart from the rare situations when an agent can act as “agent of necessity” he can only spend the landlord’s money if he has the landlord’s specific consent to do so.
And Leicester City Council appear not to know that some landlords really do subscribe to a rent collect service – I charge 9% for rent collect and have plenty of takers.
be good to see a full report on this.
Sounds like no clear management instructions/terms of business were signed agreeing with what service they were doing.
Hard to form a view without further info.
So rent collect is the new fully managed
What a time to be alive!