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Landlords Warranties and Agents

We have been pondering the new proposals from the Government in response to the Rugg review. Many of them are as expected.

What is deeply concerning about the proposals is one specific aspect of agent regulation. One of the key requirements of any regulation regime is “Enforceable undertakings around the quality of stock let and managed by agents (including energy efficiency)”. This represents a potentially radical change in the legal position.

It has long been the case that landlords make no warranty as to the fitness for habitation or the suitability of the properties they let. To use the words of the House of Lords, “Caveat Lessee”. Additionally, it has generally not been the case that agents have a liability for their landlord’s actions. These proposals seem to wish to change that position.

If it is the case that agents have to give undertakings on stock quality they will then be forced to impose those undertakings on their clients. However, a landlord who is not using an agent will not have the same requirements and will not have to warrant the quality of their stock. This is plainly iniquitous. The position could be even more unfair where an agent is not managing the stock and is employed solely on a let-only or tenant-find basis. If the sole role of the agent is to find a suitable tenant and set u a tenancy then they should not have to give any undertaking as to the quality of the stock after the expiry of their instruction.

Additionally, this will mean that agents increasingly will be fixed with liability for the actions of their principals. Of course, this already occurs to some extent. Agents have liability for Gas Safety Certificates, some liability in relation to improvement notices under the HHSRS where they are collecting the rent, and a degree of liability for failure by landlords to register tenancy deposits. However, it is debatable whether this liability should be extended further, particularly where individual landlords do not themselves have such a liability.

Any situation where landlords using agents are held to a stricter standard than those not using agents is plainly ludicrous. Agents already do much to improve the quality of management and standards in the properties they are involved with simply be promulgation of good advice and best practice. To add a formal requirement that agented properties should have a standard of fitness that does not currently exist is simply wrong. If the Government wishes to address this issue then the answer is to bring forward legislation that alters the Common Law position on landlord’s warranties.

If this is the sort of proposal that the current Government believes is appropriate for the industry then lettings agents could be forgiven for hoping that it is not returned to office later this year.

3 Comments

  • JULIETE 15th February 2010 at 2:44 pm

    I agree to an extent with the blog above, however as a volunteer solicitor in a local law clinic it is apparent to me on a weekly basis, that there are still far too many diabolical agents that represent unscrupulous landlords, who take advantage of tenants (particularly the vulnerable). I see the worst side of the industry granted, but speaking as an advisor and a tenant myself, the private rental market desperately needs to be regulated to clean up the industry and ensure that tenants have proper channels of redress that are open to all and not just those that can afford it.

    • PainSmith 15th February 2010 at 2:48 pm

      The issue is not that the sector should be regulated. This has always been something that this firm has supported. Our concern is that agents are being asked to give an undertaking that a private landlord is not asked to give. This is totally inappropriate.

  • Tessa Shepperson 19th February 2010 at 12:21 pm

    I accept what you say David, to a certain extent. However there was a case which I reported on in my blog a few years back where tenants rented a property from an agent where it was *already* subject to an order for possession.

    It is arguable that if a tenant is renting a property from a reputable agent, they should be entitled to assume that the agent will have done some checks on the property, and that this sort of thing is not going to happen.

    The blog post is here: http://www.landlordlawblog.co.uk/2008/05/12/agents-letting-property-subject-to-a-re-possession-order/

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