Two agents expelled by Ombudsman after failing to pay awards to complainants

Two agents have been expelled from the Property Ombudsman Scheme.

Both had failed to pay awards as ordered by the Ombudsman.

In the first case, the landlord contacted TPO after she was unable to resolve her dispute with Lettings Solutions, in Witham, Essex

Her complaints covered issues including tenant referencing, agreeing tenancies without explicit approval, missing deposit monies, property repairs, pursuing outstanding rent and a tenancy renewal that was made without her consent.

TPO’s investigation found that the tenants of one of the properties had left owing several months’ rent and the property in need of significant repairs.

Court proceedings followed but, although a judgement debt was made against the tenant, it proved unenforceable because the tenants could not be located.

The investigation also revealed that the tenants were known to Lettings Solutions. The Ombudsman ruled that the agent should have told the landlord that the tenants had a rent arrears history and wanted to keep pets so she could make an informed decision about whether to accept them.

The agent alleged the landlord had been informed but the landlord disputed this. The agent also failed to get written confirmation that the landlord did wish to proceed and rent the property to the tenants concerned.

The landlord also highlighted issues concerning the deposit for the tenancy. This was only partially paid and what was received was not protected by a recognised tenancy deposit protection scheme. The deposit was insufficient against what was owed.

According to TPO, a complicating factor was the agent’s poor record keeping and poor financial accounting.

This severely hampered the investigation. The landlord made allegations of monies owed to her and Lettings Solutions made counter-claims. However, the firm did not keep a sufficient paper trail or any other supporting documentation.

Ombudsman Katrine Sporle said: “The agent systematically failed to grasp the fundamental legal principle that the landlord should decide who to rent their property to.”

The landlord chose to accept the Ombudsman’s findings and the agent was instructed to pay £1,423.

Lettings Solutions has now been expelled for failing to pay the award.

However, TPO said the company appears to be no longer trading. It has provided the landlord with guidance on seeking payment of the award by other means, such as the small claims court.

In the second case, London Corporate Apartments failed to pay an award of £340 following a rental deposit dispute.

Sporle said: “Refusing to fully co-operate with a complaint does not make the issue go away.

“In this case, I had the rental agreement and other information from the complainant but no information from the agent. I therefore decided that the complainant’s version of events should be accepted and the complaint supported. By refusing to pay the award, the agent is now unable to trade and risks a fine from Trading Standards should they try to do so.”

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4 Comments

  1. Chris Wood

    If agents fail to comply with the law and TPOS or other redress codes they should expect to face appropriate penalties.

    However it is odd, then, that the Ombudsman has removed membership of these agents in this case but allowed membership (and use of the logo etc.) of several hundred agents who TPOS knew had not been complying with the law prior to their application and had been informed (and supplied evidence) that the agents did not (and still remain) non-compliant with the same legal requirements all other estate agency owners must comply with: HMRC money laundering and ICO dataprotection registration, both of which are clearly stated as being criminal offences on the organisations websites.

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    1. Certus

      Would be interesting to see how many agencies are registered with TPOS and compare with HMRC ML. I think a huge difference. Also I think NAEA should be doing this investigation or at least ensure their members are registered correctly, after all, what else do they do for my membership fee’s.

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      1. Chris Wood

        There’s a step by step guide on how to check if an agent is correctly registered here (if sole-trader, self-employed/ franchisee etc.)
        https://blog.pdq-estates.co.uk/2017/05/14/is-my-agent-local-an-expert-or-even-legal-how-do-i-check/ 

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    2. Woodentop

      The last I heard TPO does not accept complaints and investiagte unless unless they are from outside the industry. This is nonsense as one of the best forms of intelligence is from within. TPO turns a blind eye and I doubt they have the resources in any event.

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