When taking instructions, it is always important to ensure that agents know who the landlord is and whether the person giving instructions (if different) has the legal power to do so.
This is one of those issues that we often discuss with clients on the PainSmith Helpline and it is usually not straightforward. We are aware that many agents take their due diligence responsibilities very seriously however, how far these checks go can vary from agent to agent.
Many agents have a warranty in their terms of business which will normally state that the person instructing them is entitled to rent the property and has consent to do so from anyone with a beneficial interest. Such a warranty would also cover the normal consents required from a lender, insurer or freeholder.
This warranty acts as protection when an unknown party arrives at the agent’s door demanding a share of the rent because they have an interest in the property. The warranty also acts to protect agents against possible claims by tenants such as compensation for an eviction because the landlord failed to obtain a lender’s consent for the letting.
Where agents do not include such a warranty in their terms and conditions the position is a little more complicated. Whilst agents are not under any duty to carry out checks on their clients it is probably best practise to do so. With that in mind here are a few suggestions.
When taking instructions, agents should ensure that the party giving instructions has the legal authority to do so. This means that agents should either request that the instructing party provide land registry documents to prove they own the property, or the agent should obtain these themselves from the land registry online. The land registry documents should them be double checked with the instructing party’s passport or other appropriate ID.
Where those instructing an agent are doing so under a Lasting Power of Attorney (LPA) the land registry and passport checks mentioned above should be carried out and a copy of the LPA sought. The passport of the actual owner of the property should be checked along with the passport of the LPA holder. Once the LPA is obtained again agents should cross check names with the passports provided and the land registry documents.
Sometimes properties are legally owned by several people. It is therefore good practice to ensure that you have the consent to rent from all those named on the land registry paperwork. Furthermore, it is also important to ensure that any LPA documents that you receive are properly registered with and stamped by the Office of the Public Guardian (OPG). Again, it is possible to check whether an LPA has been registered by completing and sending form OPG100 to the OPG.
It can be difficult to deal with someone who barges into an agent’s office demanding information about a property rental. If that person suggests that they have some legal right to this information agents should seek legal advice. Agents are reminded of their data protection obligations and should avoid being pressured into handing over information on the spot. Under what can be a difficult situation legal advice is always recommended.
Published 21 February 2019