After a tenant paid his rent, he did not expect a few weeks later to be contacted by the landlord wanting to know where his money is.
When it materialised that the letting agent had not passed on his rent payment, along with that of three other tenants, the landlord issued a worthwhile complaint to The Property Ombudsman (TPO) which was upheld by the Ombudsman, who ordered the letting agency to pay the money owed to the landlord totalling more than £2,500, together with £500 compensation to reflect the significant aggravation caused was also awarded.
But to make matters worse, the Nottinghamshire-based company, Shield & Co, failed to pay the award, despite the fact that TPO members are required to comply with any award and direction given by the Property Ombudsman and accepted by the complainants.
Failure to pay the fine subsequently resulted in Shield & Co’s expulsion from the residential agency ombudsman for two years, which means that the company in question cannot legally trade as a letting agency during that time, because it is mandatory that all letting agents and property management agents register with one of three government-approved redress schemes, none of which will allow previously expelled agents to join.
Similarly, the TPO report that a complaint made against LPC Lettings, based in Liverpool, for not passing on rent totalling £5,967.54 was also supported by the Ombudsman. An award of £600 was granted for the avoidable aggravation.
This case highlighted the importance of letting agents ensuring they keep client money in a separate designated account and transfer all monies due to clients promptly.
An additional case against the same company covered a wide variety of issues, including renovations, invoicing and quality of repairs, treatment of tenants as well as rental payments. The Ombudsman criticised LPC for failings on several counts and instructed them to pay an award of £550 as full and final settlement. LPC Lettings was subsequently expelled from the TPO scheme for a minimum term of three years.
A third case, Bradford-based Blackhorse Property Management Limited (BP) was expelled from both sales and letting redress membership with TPO scheme for a minimum of three years following two separate cases brought against them.
The first dispute related to a lack of tenant referencing in which the Ombudsman, Katrine Sporle, stated: “I would have expected BP to have obtained proof of the Tenant’s identity and proof of address, to have verified the tenant’s ability to afford the rent through income from employment and/or benefit entitlements, and to have sought a reference from her existing landlord.” The Ombudsman made an overall award of £350.
The second dispute against BP, made by a potential seller, concerned the transparency of the contract, potential loss of viewings and insufficient complaints handling for which the complainant was awarded £300.
Gerry Fitzjohn, chairman of the TPO Board, commented: “It is important to point out that cases like these are extremely rare and concern the actions of a small minority of agents. Taking into account the vast number of sales and lettings transactions that take place every year, only a small percentage of consumers contact TPO to complain about their agent, and our recent annual report reveals an even smaller number are referred to our Disciplinary & Standards Committee.
”Wherever possible, we will always facilitate early resolutions between agents and consumers. However, agents that do not cooperate with our investigations, as in these cases, put themselves at greater risk of having a complaint upheld, as the Ombudsman only has the consumer’s evidence to consider.”
He added: “Agents must comply with any award and/or direction made by The Ombudsman against them and pay the Complainant the amount of any such award within the required period for payment. Cases of non-compliance are taken very seriously and are dealt with by the Disciplinary & Standards Committee.”