Redress scheme expels letting agent for not paying compensation

The Property Redress Scheme has expelled a letting agency following non-compliance with a redress decision.

The complaint regarded a holding deposit. The tenant had viewed a property advertised by Croydon-based Jordan Residential as having three bedrooms. 

When the tenant arrived, it transpired that the property only had two bedrooms and a converted lounge. The tenant claimed to be rushed and pressured by Jordan Residential and paid £600 without being told the reason for this deposit and whether it was not refundable.

The tenant decided they were unhappy with the arrangement and informed the agent within 24 hours that they were only prepared to accept the property at a lower market rent based on two bedroom property rents in the local area.

Jordan Residential verbally refused the offer and did not enter into any further correspondence with the tenant following this conversation. The tenant sent two letters to the agent by recorded delivery in an attempt to resolve the issue but her communications were ignored.

The complaint was raised with the PRS which decided that retention of the tenant’s holding deposit in this situation was unfair because:

- the tenant pulled out of the tenancy before the relevant costs covered by the holding deposit had actually been incurred by the agent;

- the agent had not yet taken the property off the market so the landlord had not suffered any loss by the property being held; and

- the property did not conform to its description.

PRS instructed Jordan Residential to pay £612.80 to the complainant in lieu of the holding deposit and recorded delivery costs but up to the end of last week Jordan Residential had not paid the award.

Jordan Residential has not acknowledged the PRS complaints process nor attempted to deal with the matter as a genuine claim, according to PRS. 

The PRS received no communication or evidence from the agent and it has also failed to pay the advertised complaint subscription fees to the scheme.

Jordan Residential had its membership suspended pending further investigation by the head of redress. His recommendation to the PRS board of was that Jordan Residential be expelled from the scheme due to the lack of co-operation with the complaints process and failure to pay the award.

PRS chief executive Sean Hooker says: “Failure to pay an award, however large or small, is a serious breach of our terms of reference. Agents must not assume that the complaint will go away if they remain silent and refuse to engage with the scheme.”

There is a memorandum of understanding set up between the three rival redress schemes, so Jordan will not be able to join any rival scheme until the terms of the head of redress’ decision have been met. 

Letting agents cannot legally trade without a redress scheme membership in place.