We have found a Rogue agent in Nottingham during our compliance checks for Selective Licensing.
NGalloway check compliance with all our clients before we complete the application form and if we find issues we work with the landlord to put it right before submitting the application.
Failure to declare all the facts on the application is a criminal offence so landlords are risking a lot if they don’t complete the application form correctly.
During one of our checks we discovered a portfolio landlord had deposits that had not been protected by the agent even though the landlord had headed letters saying that it had been done.
We thought that it was a genuine mistake but investigated on behalf of our client and found that the agent had closed down their business and disappeared will all tenancy deposit money.
The landlord will be liable for these deposits so we are working hard to rectify the situation.
Top tips for choosing the right agent.
Tip 1 – They are registered with a redress scheme
What is a Redress scheme registration for estate agents and property managers?
Agents must register with one of the government approved providers. They deal with complaints if you can’t get redress through the agent. All agents registered must have a complaints process but if they go out of business then this offers no protection at all.
The 3 schemes are
Property Redress Scheme (This is who we are registered with)
Property Ombudsman Limited
Tip 2 – That they have a “Real Client Account”
What is Client Account?
When everything is going well and you are getting on with your agent you may not be thinking it is important what insurance and protections are in place but when things go wrong it really does matter.
Many landlords are familiar with the term ‘Client Account’ because it crops up when buying property. Your solicitor will always ask you to transfer property purchase funds to a client account. If the firm that you are transferring the money to goes bust then it could be lost which is why any money that is segregated in the client account is protected from debtors but it must be real.
There are stringent rules for obtaining real ‘Client Accounts’ from banks because they are regulated differently. As a short cut it is possible to name a normal account “Client Account” but this is a cheat and only works when things are going well because it has no legal status.
If your agent is collecting money on your behalf either through rent or deposits then this must always go into a real client account because if it is not and they go bust your money will be lost.
Tip 3 Make sure your agent has Professional Indemnity Insurance
What is Professional Indemnity Insurance?
Professional indemnity insurance is an insurance product that will protect the agent in the event that the business is sued by a client. This insurance offers some serious protection for clients where an agent has run off and there are consequences that the landlord is left with.
If your agent has this insurance and they have neglected their duties then there is some light at the end of the tunnel. You must contact them to make a claim against the policy if your Rogue agent has run off or gone out of business.
Tip 4 – Make sure your agent has Client Money Protect
What is Client Money Protect?
Client Money Protection insurance was introduced to protect other people’s money. This is an insurance specific for protecting clients’ money from misappropriation by an agent. If the they swindle the money it is possible to get it back.
The agent can if he chooses spend this money on a flash car and fancy holidays and the landlord could be non the wiser until things go pop or NGalloway uncovers it during their compliance checks.
Unfortunately even though an agent may have a real client account it still does not mean that your money is protected unless they have Client Money Protection.
At NGalloway we have no intention of swindling your money but we know how important it is to give our clients all the protection we can so we are registered with CMP a client money protection scheme.
In April 2019 it will become law for all agents to register with a similar scheme but until then it is optional.
A condition of registration with a client money protection scheme is that the agent is audited and has a ‘Real’ Client Account and that they have in place professional indemnity insurance.
Do you have any tips for choosing the right agent? Post them here.
If you have been a victim of a rogue agent in Nottingham and have just found out that your deposits have gone and need our help with Selective Licensing.
Call us today at 01156972829 www.ngalloway.co.uk