I am a letting agent operating an small online tenant match service for the past two years. Before marketing a property, we have the landlord confirm, amongst other things, that they have and provide a gas safety certificate, epc, also we ask them to confirm that they are the landlord/have legal title and have permission from their mortgage company, whether they are in arrears etc. This is confirmed either verbally or via email (and many times both). It has now been brought to our attention, by tenants whom we referenced for a property, that the landlord was not the owner and was 'subletting' the property. We state on our terms that we do not manage properties and that deposits will be transferred to landlords. We confirm with landlords that they must be registered with one of the government deposit schemes if they are not so already. I have already paid back the tenants' reference fee (not for wrong doing but because they are very harassing and they threatened to be disruptive unless they received their fees back (£300....and they promised not to disturb again). However, they have just been in touch and demanding more (deposit plus what they say is the difference between the rent they paid and what the 'landlord' was paying ....approx. £3500.00). The landlord served them notice a few weeks ago (when trouble began brewing) and at that time advised me that he would pay the tenants their deposit back once they vacated. I do not know if this will or will not happen as I do not wish to contact the 'landlord' as I feel very disappointed and do not trust him in light of the information which has come to light...In speaking to other local letting agents, they advise that they generally take landlords' at their word about legal ownership of the property they are letting. I am concerned that our process is remote from our landlords, and only over email or over the phone. What is my liability in having marketed a property and referenced a tenant which our client is not legally entitled to let (turns out he was subletting despite the fact that we had marketed the property for him before and the tenancy went smoothly and he returned to remarket? The client carried out the viewing with the tenants, moved the tenants in to the property and provided his own AST for the tenants as well. His AST states that he is the landlord and will register the deposit. Regards xxxxxxx
Thanks for your question. Please kindly RATE my answer when you are satisfied
For the avoidance of doubt may I confirm with you that 1) you made it clear you were acting as agent for the landlord and 2) you did not hold yourself out to be the landlord of any property you are involved with and particularly that you are not named as landlord on any tenancy agreement the tenant signs please?
Very clear acting as agent to reference tenants. Wife met LL at property. We have written documentation which sets out terms agreed between tenant and landlord which also states that we do not manage the property so do not hold the deposit (which is passed to LL prior to commencement of tenancy).
2. Never held ourselves out to be the landlord. We did not see this AST....we saw the last AST for this LL and the last tenants we found for him. The AST was handed to the LL to the tenants with their respective details.
Thanks. Agents can come a cropper when they name themselves as landlord on the tenancy agreement which a minority of agents do. However on the basis most importantly you do not do this and ideally you make it very clear on any documentation that you act as agents for the landlord and better still define the limited scope in which you act for the landlord (though this is not necessary) you have no liability to the tenants for the landlords actions. Their contract is between the landlord and the tenants and they cannot come after you.
Is there anything above I can clarify for you?
what about our failure to determine (uncover) that the landlord was not the legal owner of the property....
That is not your responsibility. You cannot be claimed to have acted negligently as you ask the landlord to confirm that they own the property but even if you had not the tenant still could not claim against you as it is for them to satisfy themselves as to the landlords right to let or not and the suitability of the property.
really....the case law does not hold agents responsible for 'due diligence - standard of care' for vetting a landlord? We did ask the questions and had 'evidence' of his behaviour to believe he was the landlord but when we did the title search (which we did before the tenancy was signed...there was a mistake and it was carried out on the tenants' current property rather than the one they were moving into - ie our landlord's). So we are not responsible in any way for the fact that the landlord they found via our advert was not legally able to let to them (and as it turns out is defrauding the benefits system....good grief).
If you have acted negligently tenants can potentially seek to make a claim for negligence but one cannot claim in negligence for pure economic loss as a rule. They would need to be able to show that they had suffered some form of physical injury or property damage to pursue under negligence.
they have been given notice and now need to find somewhere else to live....and they are hopping angry (not really at us as they like us and our service but they need to vent and want to get compensated by someone.....so it is us that are getting the brunt and the LL may have disappeared). So that is the question, would they have a claim for negligence based on our actions - are letting agents deemed to be negligent if they don't determine legal ownership of a landlord? is there any case law/precedent to put my mind at rest please?
based on what you say they would not. Their claim is against the landlord not you. Agents are not required to established a right for landlord to rent. They should ask the question as a matter of best practice but even this they are not strictly required to do.
So if I reply to the tenant:Many thanks Joshua. I am very relieved and satisfied. Thank you. I shall rate you now.
The problem the tenants face is not an uncommon one. Ideally they would download a copy of the title from the land registry for £3 to check but few people have the knowledge to do this.
A reply to the tenants along the lines of whilst you have their sympathy unfortunately as agents you take reasonable steps to check with the landlord that they are able to rent the property but the tenants agreement is with the landlord and it is for the tenant to ultimately satisfy themselves as to the suitability of the property and the landlords title to it.
yes....that is why we now do so but there was human error and the wrong search was done but it was in the folder so it was assumed it was fine!!! So, in conclusion, if I reply to the tenant: As we are not the landlord, we are not party to the agreement and they must revert to their AST and rely on those terms with the landlord. We advised all along that we were only providing a tenant match and that the landlord was to manage and hold the deposit on their behalf. And regarding the title issue, that we took reasonable steps to determine the landlord is able to rent the property and unfortunately, we were all victim to someone who was actively being deceitful. is that ok?
I would not put in the last bit about the landlord being deceitful or you both being victims because in the event that were to turn out not to be true (however unlikely) the landlord may claim against you for libel. The rest is fine though.
I have received a response from the tenant....if I ask another question is this charged or is it part of my free trial?
Sylvia XXXXXXXXXXX /span>
Sorry don't know how those xxx's got in that last reply.....?? Anyway,
Dear XXXXX...this is an excerpt of the response from the tenant received yesterday.
And if I have to :
-Sit every day on your office -Call you every single day -Email you every hour -Do worst publicity ever, And finally sue you I will take all of my time to do it .
I will take all Shelter advisors or counsellors because I want that my money back.You betrayed us I dont know how is possible that you didnt check all of his references. it took me only 3 mins to find who is the real landlord on landregistry.co.uk so can tell which references xx gave you?
What is the law on harrassment?
She is very volatile....often yelling and low threshold for stress etc (this was during the process for referencing and now as well post problems w tenancy).
My office is at home so I want to avoid her possibly arriving and causing stress and upset with my family, neighbours and also the disruption if she rings/disturbs the staff and my business.
Thank you Joshua. Hope you have a lovely day. Regards Sylvia
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