Two letting agencies expelled from The Property Ombudsman redress scheme

Two lettings agencies have this afternoon been expelled from The Property Ombudsman redress scheme.

In one case, TPO expelled Lettings Solutions Ltd for two years after the agency failed to pay an award following a review of a highly complex landlord complaint concerning three rental properties in Essex. This concerns several allegations made by a landlord who let three properties through Lettings Solutions Ltd, which acted as her agent. 

The landlord contacted TPO after she was unable to resolve her dispute with Lettings Solutions Ltd.  

Her complaints covered a wide range of issues, including tenant referencing, agreeing tenancies without explicit approval, missing deposit monies, property repairs, pursuing outstanding rent and a tenancy renewal that was appeared to have been made without her consent. 

TPO’s investigation found that the tenants of one of the properties had left owing several months’ rent and the property in need of significant repairs. Court proceedings followed but, although a judgement debt was made by the court against the tenant, it has proved unenforceable because the tenants could not be located.

The investigation also revealed that the tenants were known to Lettings Solutions Ltd but the tenants had not had recent reference checks. 

The Ombudsman ruled that Lettings Solutions Ltd should have done more and also let the landlord know that the tenants had a rent arrears history and wanted to keep pets so she could make an informed decision about accepting the tenants.  

The agent alleged the landlord had been informed but the landlord complainant disputed this. Crucially, the agent had failed to get written confirmation that the landlord did wish to proceed and rent the property to the tenants concerned.

The landlord also highlighted issues concerning the deposit for the tenancy. This was only partially paid and what was received was not protected by a recognised Tenancy Deposit Protection Scheme, a legal requirement. The deposit was insufficient against what was owed.

TPO says that one of the major complicating factors in investigating this case was Letting Solutions Ltd’s poor record keeping and poor financial accounting. “This severely hampered the investigation” says a statement from TPO.  

The landlord made allegations of monies owed to her and Lettings Solutions Ltd made counter-claims. However Lettings Solutions Ltd did not keep a sufficient paper trail or any other supporting documentation. “This effectively prevented the Ombudsman from being able to reach a firm conclusion about any accounting irregularities” says TPO.

Poor record keeping also hindered TPO’s review of the case as Lettings Solutions Ltd had failed to document tenancy agreements correctly or record any correspondence concerning any informal agreements Lettings Solutions Ltd had made or any agreements between the landlord and the tenants.

The landlord chose to accept the Ombudsman’s findings and the agent was instructed to pay £1,423.74 which was to reflect the avoidable aggravation, distress and inconvenience caused to the landlord.

Lettings Solutions Limited has now been expelled from TPO for breaching the terms of its membership when it failed to pay the award. The TPO’s Disciplinary and Standards Committee also ruled that Lettings Solutions Ltd will not be able to register for sales or lettings redress with TPO for a period of two years.

It is a legal requirement for every sales and lettings agent to be registered with an approved redress scheme. Lettings Solutions Ltd’s expulsion from TPO for failing to pay an award means it will not be able to join another redress scheme until the award is paid. 

When an agency is expelled from TPO for failing to pay an award, it are also reported to Trading Standards which can enforce fines of up to £5,000 for every branch found to be trading without redress registration.

In the second case, London Corporate Apartments Ltd (LCA) has been expelled from TPO scheme for failing to pay an award following a rental deposit dispute.

LCA’s expulsion follows a complaint concerning the return of a deposit at the end of a rental agreement. The complainant contacted TPO after they were unable to resolve the dispute with LCA.  The complainant disputed the deductions made from the deposit and also claimed that the agent had failed to return the deposit in a timely fashion.

The Ombudsman, Katrine Sporle, reviewed the complaint and found the agent fell short of the standards required. The Ombudsman instructed LCA to pay an award of £340 as full and final settlement.

LCA was expelled from TPO for breaching the terms of its registration when it failed to pay the award. TPO’s independent Disciplinary and Standards Committee ruled that the agent will not be able to register for sales or lettings with TPO for a period of two years.

“Refusing to fully cooperate with a complaint does not make the issue go away. In this case, I had the rental agreement and other information from the complainant but no information from the agent.  I therefore decided that the complainant's version of events should be accepted and the complaint supported. By refusing to pay the award, the agent is now unable to trade and risks a fine from Trading Standards should they try to do so” says Katrine Sporle.

If an agency is expelled from TPO for failing to pay an award, it is reported to Trading Standards and are at risk of a fine of up to £5,000 for each branch found to be breaking the law by trading without redress registration.