PropTech firm warns agents of possible legal action over negligence

A rogue tenant occupying a property for up to nine months and refusing to pay rent could cost a combined £10,000 to the letting agent and landlord, it’s been calculated. 

Research from Credas Technologies shows the cost of rectifying other rogue tenant issues, such as damage, can run into thousands of pounds and when coupled with legal fees associated with the eviction process, the total cost can climb to five-figure sums. 

Credas - an ID verification service provider - says that while the bulk of the financial losses fall on the landlord, any perceived negligence on the part of letting agent could trigger legal action from a landlord as well as repetitional damage. 

If the agent was responsible for finding tenants and collecting rent, for which the average monthly fee is eight per cent, the annual loss is an average of £1,059. If the agent was also responsible for full management of the property, for which the average fee is 15 per cent, this annual loss increases to £1,985. These figures are based on typical UK rent averages.

Credas says it is also possible that the landlord could file a negligence claim against a letting agent. 

This might focus on a breach of service contract, or on breaking the Sale of Goods and Services Act 1982. The landlord could then claim that, by allowing rogue tenants to occupy their property, the agent has failed to act with due care and skill.