Letting agents could damage themselves as much as their landlords by failing to carry out detailed referencing or arranging insurance to cover problems with defaulting tenants. Let Insurance Services, (LIS), says that the year ahead that is likely to see rising unemployment. “Failure by agents to operate and advise on the best risk management available to landlords and buy to let investors is a quick way to lose clients and their portfolios,” said Michael Portman, MD (pictured).

“There may be more optimism about the economy, but unemployment is likely to rise for some time yet.” LIS says that some agents are still not careful enough about referencing. Perversely, as well as allowing tenants with a poor credit history to take up a tenancy, poor quality referencing practice can also lead to acceptable tenants being lost to a landlord because the referencing has been too superficial and common sense has not been applied to the individual situation.

Although letting agents are not required to register on the Anti-Money Laundering register by the end of January there is going to be a greater emphasis on agents to ensure that prospective tenants are who they say they are by requesting photographic ID and a proof of residence from tenant applicants. However, even the best referencing has to cope with a mis- firing economy and rising unemployment. The knock-on economic effect on landlords will reflect directly on the agent. Therefore if rent and legal expenses insurance policies can be easily set up, administered and claimed upon if necessary by the landlord, the proactive agent will win through.

“The message has to be that good tenant referencing and managing the risk of rent payment problems can provide their landlords with greater peace of mind,” said Michael Portman.

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