Landlord Law Essentials

Landlord Law Essentials Part 3 - Letting Agents

In this part, I am going to be talking about letting agents.

I have to be really careful when discussing letting agents, as I need to warn you about various things, but on the other hand, there ARE many brilliant agents who do a superb job for their landlords.

However, I know that many landlords have suffered through poor service from agents, so first, we will be considering whether you really need a letting agent.

Whether you really need to have a letting agent at all
Things that bad agents sometimes do:
Letting agent regulation
Finding a good agent.
And finally
Further Reading

Whether you really need to have a letting agent at all

I usually say to landlords that if they are considering managing their own property (which is much more remunerative than employing an agent to look after things for you), they need to ask themselves the following questions:

1. Do you live near the property?

It is possible to successfully manage a property yourself if you live on the other side of the country, or even overseas, but generally it is not recommended.

There are all sorts of things that can happen, from the tenants locking themselves out to boiler explosions, which will require you to attend at the property and sort things out.

In particular, if there is no one you know locally who will be able to help out in case of emergency, you should use a reputable letting agent.

2. Do you lead a busy life?

The perception of landlords is that they just sit back and wait for the money to come flooding into their bank accounts, but real landlords know it is not like that.

There is a lot of work involved, and it can be very time-consuming. If you lead a very busy life, again you may be better off employing an agent to take all the work off your shoulders.

3. Are you good with paperwork?

Because if you hate it, again maybe being a ‘hands on’ landlord is not a good idea. Renting property is heavily regulated nowadays and this means having all the right paperwork. If you make mistakes you can get into trouble. AND it can cost you a lot in fines and compensation claims.

Then you need to keep records of EVERYTHING. If the Local Authority come down on you, accusing you of committing one of the housing offences, you need to be able to prove that you are compliant. If you need to evict under one of the section 8 grounds (remember, section 21 will not be available after 1 May 2026), you will need evidence to prove your case.

If you don’t like dealing with paperwork and are rubbish at record-keeping, you are probably better off using a decent agent.

4. Are you a people person?

A lot of a landlord’s work involves dealing with (and when choosing tenants, summing up) people. Again, if you are not good with people, then a good agent can deal with all this.

5. Are you prepared to learn about landlord law and obligations?

With the coming of the Renters Rights Act 2025 and the increased enforcement that it will bring, landlords really need to know what they are doing.

Civil Penalty fines can be anything between £3,000 and £40,000 and if you commit a second offence, you can be fined twice! This can more than wipe out your annual profit.

It is absolutely necessary for landlords to have a good understanding of the law or use an information service (such as Landlord Law) which will keep them informed.

However, if you decide you need to use an agent, you need to be careful, as the next section explains.

Things that bad agents sometimes do:

Fail to reference tenants properly
Fail to keep your money in a separate trust account (and in the worst cases, go bust, taking your money with them). Although, agents are now supposed to carry client money protection insurance to protect clients against this, rogue agents probably won’t do this.
Take kickbacks from tradespeople so that you end up paying more than you need
Encourage your tenants to leave at the end of the term, or leave early so they can charge you a fee for finding a new one
Some agents are out and out criminals and will be looking to rent your property to their criminal associates to use for growing cannabis and for other illegal purposes.

Agency law

It is important to remember that you are personally responsible for everything your agent does, as they are seen as acting on your behalf.

There is a special ‘law of agency’ which sets out rules for how this works. So if your agent does something you told them not to do – such as rent out your property to tenants with pet dogs, there is nothing you can do to stop the tenancy.

Likewise, if they breach the housing regulations, YOU can be fined for this, along with the agents. The fact that your agents did not tell you about a specific regulation is not normally accepted as an excuse for non-compliance!

Letting agent regulation

Although letting and estate agents are not regulated in the way that solicitors (for example) are, they are subject to a certain amount of regulation as follows:

They must belong to a Property Redress Scheme

This is so landlords and tenants have somewhere they can bring a complaint without having to go to court. There are two schemes:

The Property Ombudsman (TPO), and
The Property Redress Scheme

They must carry client money protection

This is (as mentioned above) to protect clients’ money from agents running off with it. It is required for all agents who hold clients’ money (which will effectively be all letting agents).

The agent must display their insurance certificate in their office and on their website and provide a copy of it upon request.

They must publish their fees

The fees should be available to view both in the agents office and on their website. The fees listed should be sufficiently detailed so you can understand what they are for and what they are. If any fee “cannot reasonably be determined in advance”, the list must describe how the agent will calculate the fee.

Note that fees must be published inclusive of VAT, as otherwise it is misleading.

And also

Letting agents are also bound by the rules of agency law (as mentioned above), and by the various consumer legislation that has been passed to protect consumers generally.

The most important act is the Consumer Rights Act 2015, but there are others. For example if a contract with an agent is signed ‘off-site’ you have cancellation rights which they are required to inform you about.

There are also rules to protect consumers who have been induced into entering into a contract by ‘unfair practices’.

The ROPA Report

This is a report published in July 2019 by the Ministry of Housing, Communities and Local Government which set out extensive proposals to regulate the lettings industry.

Sadly, the report has not been implemented so far, although Matthew Pennycook, the Labour housing minister, has indicated that they will be looking to do this at some stage in the near year or so.

Finding a good agent.

There is no infallible guide. However, here are a few clues:

First – are they regulated?

The main organisations are

Propertymark
The Royal Institution of Chartered Surveyors (RICS)
Safeagent (formerly the National Approved Letting Scheme)
The UK Association of Letting Agents (UKALA)

Being a member of one of these organisations is not an infallible sign of quality but it is a good sign.

Then

Are they a member of a Property Redress Scheme? – As discussed above
Do they have client money protection? – As discussed above
Are their staff properly trained? Reputable agents will ensure that their staff have industry qualifications, such as those provided by Propertymark.
How long have they been trading? This is not an infallible sign (and all companies have to start sometime), but usually, companies which have been around for a very long time will provide a good service.
What are their agency fees? Be suspicious if they are a lot lower than those charged by other companies. Check that their fees are clearly displayed as discussed above
What are their terms and conditions? You always need to read these carefully, and clear and concise terms are another good sign.

The benefits of having a good agent

Let’s end on a good note. Here are seven benefits of using a really good agent:

They will help you prepare your property for letting
They will help you meet your legal obligations
They can probably let your property quicker than you can
They can often achieve a better rent for you
They will get a proper inventory done and deal with the deposit for you
They will deal with checking and referencing your tenants
They will deal with any problems that arise during the tenancy

If they do all that properly, and you value your time, they will be well worth the money.

And finally

If you decide to rent using an agent it is very important that you take care to find a good firm. By doing this, you will avoid a lot of heartache, stress and indeed, financial loss (if you choose a really bad firm).

Unfortunately there are a lot of poor quality agents around. Many of my Landlord Law members joined my service specifically because they were fed up with having to deal with agents messing them around and not doing things properly (or at all).

Read the further guidance below and any other advice you can get. If you know other landlords, ask around.

Once you have found your firm, keep them under review. A good firm now may deteriorate over time, for example if a key member of staff leaves.

You should also keep up to date with legal changes and do training every now and again. Knowing the business will help you keep your agents under review – and if they know that you know, they will (hopefully) take even more care than they would normally!