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Agencies expelled from Ombudsman scheme for non-payment of rents

The Property Ombudsman scheme has today announced three expulsions of agencies as a result of non-payment of rent or awards.

Firstly, a lettings agent in Luton has been expelled from TPO for 10 years after the Ombudsman supported a complaint relating to non-payment of rent received on 31 properties.

Altavon Property Management Ltd chose not to provide TPO with a submission letter or its branch file to help with the case review and did not pay the substantial awards which, with outstanding rent payments on 31 properties as well as compensation for aggravation, distress and inconvenience awarded for each, together totalled £181,254.64. 

The case was referred to TPO’s Disciplinary & Standards Committee, which ruled the firm should be expelled from TPO. TPO is now warning consumers to be aware that this firm is not registered with a redress scheme, which every sales and letting agent is required to in order to trade legally.

Under the terms of APM’s agency agreement, the agent agreed to manage the 31 properties for a landlord.  

Unlike a typical full managed service, the two parties entered a two-tier tenancy whereby the complainant let the properties to APM in return for a specified rent for a period of time. In turn, APM could then sub-let the properties to tenants of their choosing. 

Therefore, the obligations in relation to the properties were set out in the Let Agreements rather than Terms of Business. However, this alternative arrangement did not undermine APM’s obligations as a lettings managing agent under the TPO Code of Practice.

In December 2016, APM had provided a written guarantee accepting that there were arrears of rent payment in excess of £57,000 owed to the complainant but there was no evidence to show that this had been paid. In each complaint, the Ombudsman made an award for the rent not paid over and £200 for aggravation and inconvenience.

Altavon Luton Ltd, based on George Street in the town, is not connected to APM.

In the second case, an agency in Hounslow has been expelled from TPO for three years and six months after the Ombudsman supported three separate complaints relating to a series of failings, but predominantly for non-payment of rent to landlords whose properties they managed.

Total Property Management did not respond to requests from The Property Ombudsman to cooperate with any of the complaint reviews and did not pay substantial awards totalling £26,341.50. 

In the first instance the Ombudsman upheld a complaint made against Total Property Management for owing a total of £11,675.50 for not forwarding rent received.  She also awarded £500 for avoidable aggravation, distress and inconvenience.

In the second instance, as well as complaints over £3,696 of unpaid rent received, the agent was criticised for not conducting regular inspections or forwarding confirmations, not attending to a maintenance issue and not responding to complaints made. For the shortcomings in service, as well as the failure to forward rent received, £850 was awarded.  The total award was £4,546.

In the final instance, the complainant said Total Property Management had failed to pass on £3,040 rent received as well as a £700 deposit taken for a second property, and a £900 deposit taken for another. The complainant also claimed that the agent had agreed to reimburse management fees of £3,360 by way of compensation for a failure of service, but never sent the money. 

The Ombudsman upheld the complaint and, in addition to the missing rent, deposits and management fees, also awarded £1,500 for aggravation and inconvenience to the complainant, making a total of £9,620.

In a third case considered by The Property Ombudsman, Seekers Estate Agents - a sales and lettings agent based in Erdington, Birmingham - has failed to pay awards totalling £4,137 following two separate complaints relating to a series of failings in their letting and management service.  

As a result, the agent has been expelled from membership and registration for redress with The Property Ombudsman scheme for a minimum of two years.

The agent did not respond to requests from The Property Ombudsman to cooperate with the complaint reviews and did not pay awards made of £2,675 in one case and £1,462 in another. 

In the first instance, the complainant raised several concerns about the letting and management of her property, all of which were upheld by the Ombudsman.  These included the agent’s failure to provide a written management agreement, giving prospective tenants access to a property before they had signed an agreement and giving them permission to redecorate without the complainant’s permission. 

The agent also gave wrong and mis-leading information, did not protect the tenant’s deposit and did not carry out referencing checks. There were also several management issues during the tenancy relating to arranging suitable contractors to carry out work required and investigating possible breaches of tenancy.  The Ombudsman made an overall award of £2,675 to cover financial loss equal to the tenant’s deposit and for anxiety, distress and inconvenience.

In the second instance, the complainants said that the agent has not registered the tenant’s deposit of £862 with an approved deposit protection scheme, had not issued prescribed information or passed on tenancy information including the agreement, referencing checks, gas inspection status, or EPC. 

The agent was also criticised for the handling of the complaints, failing to respond to several letters including one from the complainants’ solicitor. The Ombudsman awarded the complainant £1,462.

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