General Guidance for Landlords
What is an Agent?
An agent is a person who has the power to represent another legal party (the principal) and brings the principal into a legal relationship with a third party.
Agents Common Law Duties:
- to act honestly
- to exercise due care and reasonable skill
- to carry out lawful instructions
- to keep account of money owed
- not to allow a conflict of interest
- not to make a secret profit
- observe confidentiality
Agents Legal Rights:
- to claim payment for services performed
- to claim expenses legitimately incurred
- to exercise a lien (retain and hold goods pending payment) over the principals property
Authority & Agent of Necessity:
- an agent can only act within the authority given by the principal
- an agency relationship primarily comes into existence from express appointment
- a principals instructions – known as express authority. In common law can be verbal or written
- in an emergency an agent can go beyond normal authority and act as an “agent of necessity”
WHY USE A REGULATED AGENT?
What is ARLA?
The Association of Residential Letting Agents (ARLA) is the only professional body that is solely concerned with the self-regulation of letting agents and since 1981 has been actively promoting the highest standards across every aspect of residential lettings and management in the Private Rented Sector.
ARLA is viewed by government, consumer groups, academics, think tanks and the media as the leading voice in the industry. ARLA members are seen as being at the forefront of the Private Rented Sector, ready, willing and able to comply with existing and anticipated government legislation. ARLA members successfully create, on average, over a quarter of a million new tenancies a year as well as arranging the renewal or extension of thousands more of existing tenancies every month.
Why Should A Landlord Or Tenant Seek Out An ARLA Member?
ARLA leads the industry in setting and regulating the highest standards in the industry and demands certain levels of professionalism and commitment to customer service from its membership.
ARLA members are required to work within a robust Code of Practice, which covers the key stages in letting and managing a property. There are comprehensive membership Byelaws which include compliance with such issues as handling and accounting for Clients’ money; the mandatory ARLA Client Money Protection Bonding Scheme; Professional Indemnity Insurance; Dealing with Complaints and Disciplinary Procedures.
ARLA members are required to employ a minimum of at least one member of staff, in any office, who holds a suitable industry qualification, recognised by the Association.
ARLA keeps it members up to date with changes in legislation and provides wide-ranging training and guidance to help members understand and interpret all aspects of letting and managing a property.
By using a Licensed ARLA agent you are guaranteed:
That the agency is covered by our Client Money Protection (CMP) Scheme.
The ARLA have the ability to make discretionary grants (up to pre-set limits) if you suffer financial loss due to the bankruptcy or dishonesty of the member and/or their firm.
Look at our CMP guide to find out more.
- That the agency has Professional Indemnity Insurance.
- o This ensures you are financially covered for successful claims relating to members’ negligence, bad advice or mishandling of data.
- To be consulting with a qualified and trained agent who can give you professional up-to-date advice and guidance.
- o All our members are required to carry out at least a minimum level of Continuous Professional Development (CPD) each year and many do more.
- That you are dealing with an agent who voluntarily follows the Code of Practice and Rules of Conduct laid down by their professional body.
- o If an agent does not follow the code, they can be fined or in the worst cases expelled from membership of ARLA. Our disciplinary process includes everything from cautions and warnings right through to more severe penalties of up to £5000 for each rule breached. You can be sure that the highest standards are upheld by our members.
- That you have a route to redress should something go wrong.
- o It is a mandatory requirement that all our members belong to an independent redress scheme, the choice being either the Ombudsman Services: Property or the Property Ombudsman Service. This gives you the consumer an added level of protection. The Property Ombudsman Service can award payments of up to £25,000
Why is an inventory needed?
A professionally drawn up inventory and schedule of condition will protect you from any unwarranted disputes by the tenant at the end of the tenancy. If there is an insufficient, outdated or even worse no inventory then you will have no evidence of what the property was like at the start of the tenancy. This means that if you or the agent are unable to provide documentary evidence that the tenant caused damage, then you will not be in a strong position to make a claim, in the event the tenant contests the matter
Why not save money and do it yourself?
Compiling an inventory and schedule of condition is a skill and should be carried out by someone qualified to do so. The inventory is an important document and one that may need to be relied upon as evidence in the event of a dispute and may be liable to the scrutiny of a Court of Law.
The inventory is not just a list of items placed in or on the premises, a proper inventory will include a schedule of condition of the property itself as well as the fixtures, fittings and contents. A professionally qualified inventory provider is also likely to be deemed to be impartial and will note the property in the condition in which it is found both at the start and end of the tenancy
Ask your agent about APIP
You are entitled to find out who is going to be documenting the details of your property. Ask your agent for details of the inventory provider’s qualifications and experience.
An inventory provider who is a member of the APIP (MAPIP) will have gone through training and passed an assessment based on their competency to conduct the inventory compilation, check in and check out. The candidate must also provide evidence of at least 6 months hands on experience of the role.
For your further protection members are required to have adequate, up to date public liability and professional indemnity insurance.
This demonstration of the level of competency required by the industry is aimed to give the landlord the confidence that they have the protection of professional documentation to support any claim in the event of a dispute.
How often should the inventory be updated?
The inventory should be drawn up from scratch when an agent first takes on the property. Thereafter it should be properly updated and printed out at the start of each new tenancy. Each new tenancy should have an inventory that is unencumbered by comments relating to previous tenancies at the same property.