Landlords warned not to rely on lettings agents for compliance

Landlords are being warned to not solely rely on lettings agents for compliance.

The warning comes as landlords face increasing legal obligations across areas including Right to Rent checks, tenancy management, licensing requirements and property standards as well as the Renters’ Rights Act changes.

Paul Endacott, (pictured) of 1st Avenue, says there is a common assumption among landlords that appointing a letting agent transfers responsibility for compliance.

But Endacott warns: “A letting agent can get your right to rent checks wrong, and you can still be the one facing the fine, because the responsibility starts with you, the landlord.

“This is not just the right to rent checks, it’s the new rules recently launched by the Labour government called the Renter Rights Act.

The biggest risk facing landlords today isn’t necessarily a bad tenant. It may be assuming someone else is managing compliance.”

“If your agent gets it wrong, the agent you pay to make sure you’re compliant and legal, you could be on the hook for non-compliance which carries severe consequences.”

Local authorities can issue civil penalties up to £7,000 per breach for standard procedural contraventions or poor housing conditions which can lead to loss of eviction rights. For more serious or repeated offences, landlords can face fines up to £40,000, criminal prosecution or Banning Orders.

Endacott adds: “The liability is on you the landlord to make sure your letting agent is doing everything correctly.”

Compliance checks

Beyond financial penalties, Endacott argues the bigger issue is the changing nature of professional property management.

He says: “The fines aren’t actually the most interesting part of this, because it points to a much bigger change that’s happening in the lettings industry.

“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.

“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.  The dangerous assumption is to think that just because you’ve given your authority to your managing agent that you are absolved of all responsibility and it’s your agent’s problem.  It doesn’t work like that anymore.

“The biggest risk facing landlords today isn’t necessarily a bad tenant. It may be assuming someone else is managing compliance when, legally, the responsibility still comes back to the landlord, because ‘I didn’t know’ or ‘I wasn’t aware’ is not a defence in law.”

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Author: Gemma