What Does A Letting Agent Do?
Updated: Dec 13, 2020
Landlords can manage their property themselves or use a letting agent to manage the property and tenants for them. Letting agents can find tenants to move in, complete referencing, inspect or maintain the property throughout the tenancy and more.
Please note: the responsibility and liability of a property ultimately comes down to the landlord, even if they use a letting agent to manage their property.
Letting agent services
Depending on how much you want to be involved with the management of the property as a landlord, there are a variety of services that letting agents will offer to take some of the burden away from the landlord. Although every letting agent is different, these are some of the common, standard services most letting agents offer. Be aware that how much you pay a letting agent will depend on the level of service, your geographical location and the type of property you’re letting.
One of the most basic services is tenant find, where the letting agent will literally find a suitable tenant to rent your property. This usually means taking professional photos and floorplans of the property and advertising it in the appropriate locations, such as online property portals and local newspapers. They can also arrange and attend viewings of the property, conduct any referencing or right-to-rent checks, set up a tenancy agreement to be signed by both the tenant and the landlord which is legally enforceable and they can even create an inventory of the property for accurate and fair deposit deductions at the end of tenancy.
If you only choose this service you will be able to find a tenant to rent the property, then manage the ongoing aspects of the tenancy such as rent collection, maintenance, property inspections and deposit disputes yourself.
This service is sometimes added onto tenant find service, depending on which letting agent you use. Here the letting agent will collect and protect the deposit, collect the rent from the tenant and can also chase up rent arrears, serve notices or inform/advise you of next steps for tenants that do not pay rent. Some agents will even offer insurance that protects your income in the case of rent arrears.
This service, in practice, has the letting agent manage your property completely, taking on most tasks that usually fall to the landlord. This includes finding the tenant and collecting their rent, but also corresponding with the tenant directly throughout the tenancy, organising maintenance, inspecting the property, inventory creation and any deposit disputes. However, be aware, just because the letting agent manages the property, does not mean the legal responsibility is taken away from you; the landlord is always ultimately responsible for the property.
Summary of services
The list below covers the common services that a letting agent will be able to provide to a landlord. You may want to choose an agent that can offer services tailored to your needs.
Inventory creation/deposit disputes
If any of the above services are what you’re looking for, ask your potential letting agent which they can offer and on what service package.
Which service should I use?
The service you use through a letting agent depends entirely on how many properties you let, where you live in relation to them and how hands-on you wish to be as a landlord.
If you only let one or two properties, you may simply want help finding a tenant, as you can easily manage the properties yourself. You may also choose a rent collection service if you don’t want the hassle of chasing payments.
For a fully managed service, you may own property that is far away from where you live, for example, if you are an overseas landlord, or you may have a large property portfolio that means you cannot feasibly manage every single property.
Protection offered by letting agents
By law, all letting agents must be part of a redress scheme. This ensures that you can further any complaint you have against your agent to a mediator organisation, with the possibility of compensation.
All letting agents must be part of a Client Money Protection (CMP) scheme, which ensures you are entitled to claim any monies lost through misappropriation of your funds or if the agent goes bust through the CMP scheme.
Good letting agents are also experts in the latest legislation, regulation and laws in the private rental sector, meaning they will ensure your property and any tenancy agreements will be legal and follow legislation.
Questions to ask your letting agent
If you’re looking for an agent and want to make sure they’re the right fit for your needs, be sure to ask them some of the following questions. How they answer may affect your choice:
What kind of tenants would you put in my property? A good agent will know to pick the right tenant for your property; you won’t want students living in a family home, or a family living in a student property. They will also perform necessary checks to ensure tenants are able to pay rent and look after the property.
Where can I find fees on your website? Agents must be transparent in their fees, if you can’t easily find them on their website, they are breaking the law.
How long does it usually take for you to find tenants? Their answer should be reasonable and realistic. Too long and you might question how effective they are, too short and they could be rushing an unsuitable tenant into your property.
Do you provide tenants with all the legally required documentation at the start of their tenancy? Remember that the landlord is ultimately responsible for their property. A good agent will provide all the documents that the tenant legally requires. If the agent breaks the law by not providing the right documents, it could be you who takes the blame.
What will you do if the tenant falls into rent arrears or I need to regain possession of my property? A good agent will have plans in place to ensure you get the money owed to you and has the knowledge and correct, legal paperwork to regain your property in the worst case.
Do you offer regular safety checks and inspections? Electrical's, legionella, smoke alarms, gas safety, carbon monoxide and other hazards outlined by the housing health and safety rating system need to be checked to ensure your property is safe and compliant. A good agent should have experience managing this and should offer examples of what they check. They should also ensure the property is fit for human habitation to the minimum standard before tenants move in.
How often do you visit the property and how would you report back to me? Communication is key for a good letting agent, and they should keep you informed of your property’s condition whenever you require.
What redress scheme and Client Money Protection scheme do you belong to? If an agent can’t answer, or they don’t appear on the members list for the scheme they mention, then they are breaking the law.
Letting agent costs
How much you pay for a letting agent depends on the service you choose and the agent you choose. It would be best practice to get quotes from several agents and compare their track record before choosing one, but average prices for services can be as follows.
Tenant find – usually a one-off cost, charged at 1/2 months rent plus VAT to a minimum of £395 plus VAT.
Rent collection – usually a small percentage of the monthly rent, anywhere around 5% of the rent could be charged.
Full management – a bigger percentage of the monthly rent that goes to the letting agent. The percentage can tend to be between 9%-11% plus VAT.
Finding a letting agent
If you decide that you could use a letting agent to take some of the hassle out of being a landlord, then we recommend using one that is ARLA Propertymark Protected.
Those who display the logo not only guarantee to be part of a redress scheme and CMP scheme, they also undertake regular training to ensure they are up to date with the latest law and legislation, are qualified to high industry standards and must follow a nationally recognised Code of Practice.
Should you have a complaint against an ARLA Propertymark Protected agent, there is a further step beyond complaining to their redress scheme, where we will investigate complaints and conduct disciplinary hearings where possible.
If you have any questions or would like any further information please contact us at email@example.com or call 0191 228 6962.
The team at Tyne2Let