An agent is a person who has the power to represent another legal party (the principal) and brings the principal into a legal relationship with a third party.
An insurance agent (or insurance broker) creates a legal relationship between yourself (principal) and the insurance company (third party).
What you must remember is that the insurance agent is your agent, not the insurance company's agent. If she makes a mistake completing your proposal it is your mistake, not the insurance company's mistake.
Any loss therefore would be your fault, and your only redress would be a claim on your agent for negligence.
Similarly, if your agent undervalues your property for an insured sum, then an uninsured loss is your fault, not the insurance company's fault.
This may be brought about by a formal agreement (written contract) but more usually by implication from the conduct of the parties.
If you instruct an estate agent to sell your property, by implication and custom and practice the agent is expected to act on your behalf in his usual capacity - no written contract is required.
If you use an agent, and there are some very good reasons for doing so, you need to be very careful how you select one. From a landlord's point of view, selecting an agent is every bit as important as selecting tenants.
Virtually anyone can set up as an agent - you don't legally need to be qualified - many do and make a complete hash of it, so don't be a guinea pig. Don't take the first agent that comes along either - get several agents to review your letting, spend some time with you explaining their services and assessing the property's letting value.
Agencies vary from one man (or woman) bands operating from a private address through to high street national chains with hundreds of employees. There are pros and cons to both, just as there are from a tenant's point of view, either renting direct from the landlord or going through a letting agency.
Professional agents will give you an idea of the letting's rental value, a copy of their contract to review and advise on all the necessary aspects of letting. Get their fees and valuation in writing at an early stage.
Remember, you hire an agent to reduce the stress of letting property, not to increase it. If this is not the case, find another agent fast!
There are always unscrupulous agents and "professionals" around who will take your money and give you a poor or non-existent service. Especially when times get hard some go bankrupt owing landlord's thousands in rent payments and tenant's deposits. However, with a little care and common sense these types are easy to spot.
You may decide to use an agent to let the property for you and then carry out the management of your properties yourself, or you may opt for a full management package. Either way you want a professional service which you can rely on.
It's important that landlords as well as letting and managing agents keep themselves up-to-date with changes in the letting laws.
Professional agents use a contract, an agreement drawn up between agent and principal (the landlord).
As landlord you should always read the contract carefully and make sure you are not agreeing to any unreasonable terms or charges or taking on all of the responsibilities.
First you must decide: do you want your agent to Let Only, or do you want full management?
Letting only means the agent is not responsible for the ongoing management of the property or if you are in breach of any of the letting laws. As a guide, letting only will usually cost you in the region of one-twelth (one month's rent) to one-tenth (10 per cent) of your annual rental income.
On going or Full Management means the agent will take care of virtually everything and to some extent is liable if he is professionally negligent. Full management usually costs between 6 to 15% of your annual rent depending upon circumstances - usually how many properties you have under management with the agent.
Lease renewal fees can cost anything from a nominal fixed fee of say £50 to 100% of the original letting fee.
Be very clear before you sign what the charges will be, who is responsible for what (for example Gas Checks) and how much you pay.
Remember, all fees are open to negotiation, which should be done before you sign the contract. Be aware though, agents need to make a living - fees are their lifeblood. If you knock them down too much your service is likely to suffer - in this life you tenant to get what you pay for.
Look for the termination clause and be clear about what you have agreed to to terminate your contract. Usually this will be by giving 2 months' notice in writing at least two months before the end of a tenancy. If you continue on beyond the end of a tenancy you will likely be required to pay a renewal fee and on-going management fees.
Watch out for a little sneaky clause which allows agents to take a percentage of the selling price should you sell the property to the tenant or members of the tenant's family.
Agents often want payment up-front. This plays havoc with your cash-flow and again this can be negotiated, especially if you have several properties to be looked after.
The contract will spell-out a whole series of obligations for the landlord:
If a problem arises don't mess around. Contact the senior person in the agency and demand some immediate action - keep up the pressure until something is done and don't take excuses or no for an answer. If you don't get satisfaction you can contact their professional association and/or the local trading standards people. Follow everything up in writing to record exactly what happens and what has been promised.
