Subscribe Feed (RSS)It definitely pays to let through an ARLA registered agent
May 22nd, 2009 by Alison | No Comments | Filed in Property Market News
Musings of a Brighton Property Finder
The Times carried an article today about an accountant with 3 buy-to-let properties in Shoreham which he rented out through Scarlet Property Services. Sadly for Scarlet and the accountant, the letting Agency ceased trading, taking deposits and rent with it. Scarlet Property Services wasn’t registered with Arla, so the landlord has no claim against the agent, apart from a contractual claim under contract law, which would presumably leave him little in the way of change after he had paid a lawyer to represent him for the £3,000 owed.
The accountant also feels he has to repay the deposit to the tenants, as although the tenancy was registered under the Tenancy Deposit Scheme, the contract was between the tenants and the landlord, so the tenants have a claim against the Landlord. Although the deposit is protected by the TDS, it is the landlord who has to pay if the Letting Agent can’t which seems a bit unfair, since due to government regulation, Landlords are now prevented from holding deposits!
As a company, most of our rental Clients are in London and at weekly rents which render the terms of the Housing Act 1988, obsolete. Deposits we deal with in London typically start at £20,000 and the London office always insist that the tenancy is registered with the TDS and is subject to the terms of the Housing Act anyway and alert the tenant to the risks if the agent is not ARLA registered. We also do a great deal of owner direct deals in London, in which case the deposit is either held in our Client account or in the Client Account of a reputable lawyer.
In Brighton however, few rentals are of values which render the Housing Act redundant, and although the market is still buoyant the example of Scarlet Property Services exemplifies the intensification of competition in the rental sector since rental income has become the main revenue stream for estate agents nationwide. And as for the know-it-alls proclaiming that landlords shouldn’t use non-ARLA registered agents - it wasn’t long ago that one of the biggest London Agents, Foxtons, wasn’t registered and their future has looked increasingly precarious until very recently.
Ability to find a good tenant used to be the key criteria for finding a Letting Agency. Buy-to-letters buying through this Brighton Property Finders Agency, will be strongly advised to check the ARLA thing too!
Tags: ARLA, Brighton Property Finder, Buy-to-let, Tenant's deposits, the TDS, What happens when letting agents go bust
