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Ombudsman Column: The dangers of letting property
publication date: May 23, 2008
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 Estate agents who
deal with lettings are
being advised by the
Ombudsman for
Estate Agents,
Christopher Hamer,
to pay particular
attention to their
dealings with clients.
With uncertainty in the residential sales sector, there is an increasing
emphasis on renting property in the private sector as a housing solution
for many people as they wait to see what happens with mortgage
availability and property values. But in his first quarterly report for 2008, Mr.
Hamer reveals an 86 per cent rise in cases investigated that concerned complaints
involving residential lettings compared with the last quarter of 2007. “Some of this growth can probably be attributed to the OEA only recently
becoming involved with the lettings sector in a big way so people are becoming
more aware of my scheme as a means of redress when they have a complaint,”
he said. “In a time when many people are feeling more than usual stress over finding and
keeping a home it’s important that all parties co-operate with each other and try
to avoid needless difficulties arising.” Mr. Hamer’s report shows that new cases involving lettings rose from 37 in the
last quarter of 2007 to 69 in the period from January 1 to March 31 this year.
Of the 19 cases involving lettings closed in the first quarter of 2008, 13 were
resolved in favour of the complainant. The disputes considered in relation to
lettings arose from agents mainly failing to provide clear communication to either
landlord or tenant about the transaction and issues to do with rent collection or
repayment of deposits. Where residential sales are concerned, the number of new cases remained around
the same level at 220 for the quarter until March 31, 2008. The overall number
of enquiries received by the OEA rose by nine per cent to 2,983 between January
1 and March 31. But of the 1,655 enquires that came within the Ombudsman’s
terms of reference, 448 concerned lettings, a rise of 39.6 per cent, while 1,140
were about sales, a rise of 1.6 per cent. At the end of the quarter, 12,672 offices belonging to 5,683 firms were covered
by the OEA scheme. Of these, 3,350 offered both sales and lettings and 839
just offered lettings. The OEA only began dealing with complaints concerning lettings in June,
2006, following a rule from the National Association of Estate Agents that all its
members, with a few exceptions, should be part of the OEA. On January 1 this
year, the scope was broadened as firms accredited under the National Approved
Letting Scheme also came under the auspices of the OEA for the first time. Case studies from the OEA report Within the OEA’s quarterly report there are several case studies on complaints dealt
with by the Ombudsman, three are reproduced below, to see the full report visit
www.oea.co.uk Restrictive Covenant The Complainant advised the Agent that she wished to purchase a property in
order to rent it out. The Complainant viewed a property and made an offer of
£149,000, which was accepted by the Seller. Three weeks later the Complainant
received the results of a survey she had commissioned and this revealed that the
property had previously been a Local Authority property.
The property was subject to a covenant which restricted who the property could
be rented to. Consequently, the Complainant decided to withdraw her offer and
considered the Agent to have been in breach of the Property Misdescriptions Act
and the OEA Code of Practice by not disclosing these facts. This Complaint was not supported as the Agent had no obligation to reveal
this information even if he could have been reasonably expected to be
aware of it. Sales Particulars The Seller Complainant requested that the Agent amend the Sales Particulars
which showed that a dining room cupboard was included in the sale price.
The cupboard was of sentimental value and the Seller had no intention of
leaving it within the Property. The Agent failed to amend the Particulars.
The Seller then had to agree with the Buyer that other fixtures and fittings
would be included in the selling price as compensation for the removal of
the cupboard. I found for the Complainant primarily supported by the fact that the Agent
had failed to agree the draft Sales Particulars with the Seller to ensure they
were correct. This leant confusion to the transaction as it was the expectation
of the Buyer that the cupboard would remain. Two further complaints of communication failures and the fact that the
Agent failed to financially qualify the Buyer were not supported due to
the comprehensive Progress Notes which evidenced that the Agent acted
appropriately in this regard.
The Agent was severely criticised by the Ombudsman for failing to launch any
form of investigation throughout the in-house complaint handling process which
extended over a 7 month period. The total award made was £800. Home Information Packs The Complainants put their property on the market as they had seen another
property which they liked. They signed up with the Agent to have a free HIP
as they had also instructed the in-house conveyancing service. The Agency
Agreement clearly described the circumstances under which a fee would
become payable for the HIP. These were:
For reasons which had not been stated, the Complainants decided to instruct
the Agent to stop marketing the property five days after being instructed.
They also requested that the Energy Efficiency Survey to be put on hold. The
Agent did advise the Complainants that they would still have to pay for the
HIP as the Agent had already instructed the provider. The Agent sent out their invoice and a number of days later received a letter
of complaint. The primary complaint was that the Complainants believed
that the HIP was free therefore the Agent was not entitled to the charges
that they were making. They also complained that the Agent never told
them about the charges and that there was no breakdown as to how the
fee was made up. The Ombudsman concluded that the Agency Agreement clearly explained
what the fee would be and when it would be charged. He did not support
the complaints made.
jdm achieves
outstanding results
in independent
survey The Ombudsman for Estate Agents
Scheme recently conducted a random
survey of the quality of service offered by
NAEA member jdm’s Locksbottom branch
– the impressive results were as follows: Staff rating received by
category Professional score of 9.6 out of 10 Friendly score of 9.6 out of 10 Knowledgeable score of 9.4 out of 10 Helpful score of 9.6 out of 10
The Ombudsman for Estate Agents
surveys 20% of its member estate
agents at random each year. jdm
Locksbottom’s assessment was
conducted by survey forms being given
to the last 10 buyers and seller clients
and the responses independently
audited. jdm Locksbottom branch manager
Maureen Campbell-Long, said “Our
team of staff work hard to provide the
highest levels of service to all of our
clients, so I am delighted to see this
hard work being identified through the
consistently high scores achieved in this
survey of our performance. “The findings also highlighted that
100% of our buyer and seller clients
surveyed stated that they would
recommend jdm to friends – another
fantastic endorsement.”
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