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Lettings agent ordered to compensate landlord after rent short cut

The Property Ombudsman has ordered a lettings agent to pay £200 compensation to a landlord after accepting a tenant on the strength of a screenshot of a bank transfer.

Local media in Kent report that landlord Robert Knights let out his property in the county. 

He instructed local agency Hatch Batten to find a tenant, paying a £450 fee.

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But the tenant was allowed to move in after showing the agency a screenshot - however, the agency is reported to have failed to check that the funds depicted in the screenshot had cleared. 

They had not.

The tenant then continued to live in the property, rent-free, for six weeks as he gave excuses each time payment was expected.

The landlord asked Hatch Batten to compensate him with the £1,551 rent he had missed out on, but the company declined, offering only to waive its £450 finder's fee.

The landlord then took the matter to The Property Ombudsman.

Of four complaints the landlord made, TPO upheld two.

The first was that the agency should have have been certain the tenant's funds had cleared, or else advised the landlord that they had not and allowed him to decide whether to proceed with the tenancy. 

 

 

The Ombudsman said this was particularly important because of the known risks associated with the tenant: both the agency and Knights were aware that the tenant had failed reference checks because of unsettled county court judgements against him. 

Secondly, the guarantor of his tenancy had also failed reference checks.

TPO awarded Knights £650 for these issues reduced to £200 to take account of the firm's waiving of its finder's fee.

You can read a full local press report of the issue here.

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    Both the tenant and the guarantor failed credit checks, then why give him a tenancy? I wouldn't have touched him with a barge pole .

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    Blatant disregard for their client/landlord. Shocking. They should be penalised heavily for that.

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    This fine is ridiculous. How can we trade without letting agents. If fines are taking money off them, they will go out of business. Then we have no way of filling our property portfolios. Who will look after our investments then?

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    We don't actually need letting agents at all unless there were to be a shortage of tenants. I have found Gumtree quite enough for all my best properties, only using letting agents as a last resort.

     
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