What to do if your letting agent is in breach of contract

Landlords Nov 30, 2021

Letting agents often rank near the bottom of public surveys, such as the MORI veracity index, measuring the most trusted professions.  Unsurprisingly, then, it's not uncommon for landlords and to feel disgruntled about the standard service they receive. But what happens when the issue is more serious than simply customer dissatisfaction, and the agent is in breach of contract? Here, we've got everything you need to know about what to do if a letting agent is in breach of the contract.

An industry where the customer rarely comes first

There's nothing quite as frustrating as receiving a poor service from your letting agent. A strong relationship between the two of you is important as you've placed a high degree of trust in them to ensure everything runs smoothly with an important asset.

Indeed, frustration with agents seems to be on the rise. In 2019, The Property Ombudsman reported a 20% rise in complaints against letting agents, with complaints registered by both landlords and tenants in almost equal numbers.

The primary areas of concern involved inadequate communication and record-keeping, complaints handling, and marketing and advertising. While these issues are all enormously frustrating, it's sometimes difficult to know at what point the service rendered is so poor that you are legally entitled to compensation.

What behaviour constitutes a breach of contract rather than just poor customer service?

If there are disagreements, you’ll need to differentiate between poor customer service and an actual breach of contract. That’s why your first port of call is the contract itself, which specifies all the details regarding the commercial relationship.

An agent that is slow to respond to emails might be providing a poor service, but it's not a breach of contract. However, one who doesn't do their job correctly, such as reference a tenant when you've paid for the service, is potentially in breach of their legal duty.

Determining the difference can be challenging, but if the agent hasn't done something promised in the agreement, you can assume they're in breach of contract. Before entering into an agreement with the agent, be clear about what you expect. Agents tend to tailor their services to landlords to win more business, so there's room for a discussion about expectations.

Here are some possible signs your agent has breached the contract:

  • Doesn’t register the deposit if they’ve agreed to do so.
  • Doesn’t follow through with marketing promises, such as putting the property on Rightmove Premium.
  • Fails to inspect the property correctly.
  • Doesn’t take due care with the inventory or checkout.
  • Mismanages tenants if instructed to manage the property.
  • Misses a break clause in the tenancy agreement.
  • Fails to adhere to letting agent client money protection regulations.
  • Charging for fees not outlined in the terms of business.

And here are times where a letting agent might be providing a terrible service but isn’t in breach of the contract:

  • Slow to respond to emails
  • Doesn’t let your property in the time expected
  • Slow to reply to tenants if managing the property or is rude
  • Marketing and advertising materials fail to generate interest in the property
  • General lack of communication
  • If the tenant fails to pay rent
  • Too expensive

What about hidden fees?

Another primary issue for landlords is that of hidden fees. At first, it might seem like the agent is bundling one set of fees after another into their service, but a quick check of the contract can shed some light on an agent’s way of charging.

Again, having complete transparency over your agreement with the agent can give you more insight into hidden fees. By law, the agent needs to show all the fees they charge. If their fee structure isn’t clear, check the small print in the contract and don't be afraid to ask as many questions as you need to prior to signing anything.

Where and how can landlords report an agent?

If it reaches the point where you decide to make a formal complaint against a letting agent for what you believe is a breach of contract, you’ll need to know where to direct your complaint.

Complain to the letting agent

In the first instance, you should go directly to the letting agent. Communicating your dissatisfaction and bringing the problem to their attention is vital for ensuring everything is managed correctly. Most reputable letting agents have a complaints procedure in place and will attempt to solve the problem in-house – you can expect it to be handled by a member of senior management. If no procedure is available, send a clear written letter detailing the problem.

Use a redress scheme

If your complaint falls is ignored or you feel it hasn't been a satisfactorily addressed, this is the time to escalate the issue to a redress scheme. The agent will need to belong to the scheme for you to raise an issue (more on that shortly), and they will have a complaints procedure for you to follow. The redress scheme will look into the matter.

Citizens Advice

With Citizens Advice, you can benefit from free legal advice, and they can advise you on the best course of action to take relating to your issue.

False advertising

If an agent has misled you with false advertising, you can complain via The Advertising Standards Authority (ASA), the UK's independent regulator for advertising across all media.

What to look out for before instructing agents

Many potential issues can be avoided before settling on an agent. By looking out for certain red flags, you can reduce the likelihood of receiving subpar service that doesn't meet the terms agreed in your contract. Some straightforward due diligence includes actions such as combing through the fine printing of the contract and checking which redress scheme they belong to.

Agents are also legally required to be part of a redress scheme, such as The Property Ombudsman, as well as a client money protection scheme. Failure to comply with either means they’re breaking the law and could be fined £5,000.

Government-approved letting agency redress schemes include:

  • The Property Ombudsman
  • Property Redress Scheme (PRS)
  • Ombudsman Services

While approved client money protection schemes include:

  • Client Money Protect
  • Safeagent (previously NALS)
  • UKALA Client Money Protection
  • Money Shield
  • RICS
  • Propertymark

There are also additional schemes that are optional, such as The National Approved Letting Scheme and Arla Propertymark. These aren't mandatory, but agents that are part of them may be regarded as more reputable.

It’s also worth checking reviews from other landlords to see if the agency has previously provided a good service. Looking on sites like Trustpilot and All Agents can give you a better idea about what to expect from the letting agent.

Summary: A smooth service

Disputes between landlords and agents can happen, but redress schemes are in place to help if you believe a contract has been breached. And you can mitigate potential issues by doing your research and spending time going through the contract so that everything is clear between you and the agent before you instruct them to let your property.

At Home Made, we are confident that that any landlord doing their due diligence to review our service would be thoroughly impressed by what they find. We are properly accredited with all the relevant consumer protection services, our fees are entirely transparent, and our glowing Trustpilot reviews are a testament to the standard of service we provide our clients. We are a proptech lettings service, not an agent, and we're certain that anyone who gets in touch with us to find out more will be able to tell the difference immediately

At Home Made, we offer a hybrid lettings solution that adds value at every stage of the rental process. With our game-changing new landlord platform, The Property Wallet, we offer London landlords exceptional tenant-find and property management services for a low monthly fee.

  • Avoid expensive upfront fees and spread the cost of marketing your property with the option to pay monthly.
  • Free rent collection and arrears chasing.
  • Sign off and see all charges and payments in your dashboard.
  • Real-time updates on marketing, viewings, and offers.

Prices start from just £50+VAT/mo for tenant-find and £60+VAT/mo for management. Alternatively, you can pay a one-off upfront fee of £1,200+VAT for our tenant-find service.

If you would like to speak with us about your property needs, contact us via our website to find out how we can help. If you're ready to get started, book your free valuation here.

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Check out more of our landlord advice here and follow us on Twitter, Linkedin, and Instagram for regular updates on industry compliance standards, market insights, and Home Made company news.


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