An Ombudsman for all seasons

Days are getting longer and the flowers are in bloom, spring has arrived, bringing with it the urge for many to move home. Whether you’re selling, buying, letting your home or taking a new tenancy, it’s important to know where to get help if things go wrong.

As more people start to feel the pinch, in uncertain times the rental market is seeing growth because many see renting as a safer alternative. With the demand for rental properties continuing to increase, so have the calls to our contact centre from both tenants and landlords who’ve experienced problems with letting agencies.

One recent case that stood out concerned two teenage girls, one whom contacted us for help, after renting a furnished property through a letting agency. New to the rental market they experienced some serious problems, which eventually led them to having no option but to move out of their home.

Some of their problems were avoidable had they done their research before bulldozing into the unregulated realm of lettings, however had the letting agent been regulated or signed up to a professional body or an ombudsman scheme things could have turned out differently.

Case study “Don’t let me down” a tale of two tenants Kim and Kath

Kim and her friend Kath are eighteen years college students studying to be beauticians and working part time at a local salon.

Keen to move out of their parents’ houses, they saved up £1000 and decided to privately rent an apartment together. Neither of the girls had lived away from home before so went to a local lettings agent for advice and to see what they could afford.

A local landlord instructed a letting agency to rent out his apartment whilst he was working abroad. The letting agent offered the girls a two bedroom furnished apartment for £500 per month including bills, so they went to view it. They liked what they saw and were keen to move in.

Kath and Kim handed over £100 for admin fees so that the letting agent could run the necessary checks. The agent said that it was bad news, and before the girls could sign the six month tenancy, the letting agent asked for a guarantor, because they’d never rented before. Kim’s sister, who worked full time and lived with her partner nearby, agreed to sign the tenancy as guarantor. The girls signed, paid their deposit, collected the keys and moved in that week.

For the first few weeks they partied, practised their manicures and settled in, everything was going well; until they received a council tax bill for £1000. They thought council tax was included, as the letting agent advertised the monthly cost as including “all bills”.

Kim phoned the letting agent to ask about the council tax, he told the girls to “check the details of the tenancy agreement”, saying “there’s no mention of the £500 including the council tax”. They asked for details of their landlord so they could speak to him direct, but the agent wouldn’t tell them who he was.

Money was tight; the girls worked extra hours at the salon to cover the shortfall.

Working the extra hours, studying and having little disposable income started to take its toll, Kath and Kim argued more and more and one night Kath packed her bags and moved out.

Kim tried to find someone else to move in before the next rent instalment was due but couldn’t. Because she was under 25 she wasn’t entitled to housing benefit. Just when she thought things couldn’t get any worse the salon where Kim worked cut her hours.

Sad, feeling harassed and unable to afford the rent Kim moved back to her parents and because she terminated the contract early she lost her deposit. The letting agent then aggressively pursued Kim’s sister for the remaining rent, plus additional costs to clean the apartment and for broken items. The letting agent had never provided an inventory so it was difficult for Kim to dispute the damages.

Kim’s sister (her guarantor), had not really understood that she had agreed to be liable for the rent if it wasn’t paid. After much discussion she reluctantly agreed to pay the full outstanding amount.

Kim’s sister was angry with her and so were her parents. Upset and confused Kim complained to the letting agent and followed its complaints procedure. Eight weeks passed without a satisfactory resolution being reached so she contacted us for help.

As first time renters she believed that she had been misled. She felt that the agent had failed to fully explain her responsibilities, what the rent included and didn’t include and what the role a guarantor was. She was also unhappy that the agent gave her little chance to clear the arrears and that she wasn’t provided with the landlord’s details when she requested them. She also mentioned that she felt harassed and bullied by the letting agent and this was the reason that the left the property early.

Unfortunately Kim’s tale is one we hear too often; the letting agent had not signed up to Ombudsman Services Property so unfortunately we were unable to help. In fact the agent wasn’t a member of any professional bodies or redress schemes so she could only consider taking her complaint to the courts.

First time renters must do their research before making any decisions about renting. As we heard with Kim if things go wrong they can go wrong fast and there can be serious consequences.

If you use the services of an estate agent or rent from a social landlord, laws and regulations exist to ensure that these behave fairly and appropriately. The lettings industry remains unregulated so the letting agent is not subject to any government legislation.

With huge thanks to Chief Ombudsman Lewis Shand Smith

Ombudsman Services

The Ombudsman’s top tips for tenants

Redress – If possible use a letting agent which belongs to a professional organisation like The Association of Residential Letting Agents (ARLA). All ARLA agents must adhere to a code of conduct, offer client money protection and provide free access to a redress schemes if things go wrong.

Rents – check that you can afford the rent. Remember that you will need to factor in other costs such as council tax, heating and water rates. Make sure you check the small print for other costs such as service charges.

Deposits – these are usually larger than the usual monthly rental figure. Legally the landlord or lettings agent should protect the deposit through a tenancy deposit scheme, such as the one provided by the Dispute Service (TDS). These organisations guard against the chance of any misappropriation of monies, for example if the letting agency closes down.

Inventory– Ask for an inventory from the letting agent - especially for furnished properties. Check this carefully and if there is anything you are concerned about mention it as soon as possible and take and keep photos to support your query. An inventory will help if there are disputes when moving out of the property.

Tenancy – check the small print and ask a friend, a relative or a trusted helper such as Citizens Advice, to read it too. There are different kinds of tenancy agreement. Most shared tenancies contain a joint liability clause. This means that you are responsible for the actions of the people you share with. You would, for example, be responsible for paying their share of the rent if they move out. If you are asked to provide a guarantor when sharing, then make sure that this person understands that they are guaranteeing to cover the responsibilities of everyone named in the tenancy agreement.

**Arrears **– If your circumstances change and you can’t pay the rent seek advice as soon as possible, check your rights, responsibilities and find out about any help you may be entitled to. Visit www.direct.gov.uk or Shelter www.shelter.org.uk