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View Full Version : A couple of ARLA related questions and best practice



kayak
25-04-2008, 16:52 PM
Hello all,

Couple of questions which came up in recent conversation.

Do ARLA insist on an independent inventory and schedule of condition being carried out, i.e. not by the landlord?

Do ARLA state that you are not allowed to take a bond/deposit/holding fee other than your agency fee before the tenants have been fully referenced? If this is the case, how would you protect yourself/the LL from a tenant opting out of the tenancy suddenly?

Finally, does ARLA state that tenants are allowed to take up to seven days to sign the inventory and schedule of condition?

I am going to have a look on the ARLA site now but would appreciate it if anyone knows the answers, or indeed have any thoughts on best practice. Views from tenants, landlords and Letting agents appreciated!

Kind regards,

John

Bel
25-04-2008, 17:32 PM
Do ARLA state that you are not allowed to take a bond/deposit/holding fee other than your agency fee before the tenants have been fully referenced? If this is the case, how would you protect yourself/the LL from a tenant opting out of the tenancy suddenly?





I don't know what ARLA say generally,

but under OFT guidance, you can only claim reasonable and justifiable administration expenses when a tenant opts out of a tenancy before signing. You cannot keep, say, a whole months deposit as a penalty for 'messing you about'. What is not justified must be refunded.

kayak
25-04-2008, 17:41 PM
I don't know what ARLA say generally,

but under OFT guidance, you can only claim reasonable and justifiable administration expenses when a tenant opts out of a tenancy before signing. You cannot keep, say, a whole months deposit as a penalty for 'messing you about'. What is not justified must be refunded.

Apologies, I didn't quite make myself clear.

I didn't necessarily mean that the whole amount would be kept. For example let's say that two tenants pay £50 each agency fees, and also pay a bond/deposit of £300 each for a tenancy starting in over a months time.

Would ARLA/the OFT and anyone else of importance allow the bond to be collected before referencing would have been completed?

Naturally if the tenants failed referencing/dropped out of the contract then a reasonable fee could be kept.

I guess this brings up an interesting point of what is reasonable. If a tenant changes their mind the day after then just a £50 agency fee could be reasonable, however if they have placed a holding deposit six months in advance for a property and then drop out the day before then you could easily argue the whole deposit and agency fee would be reasonable. In reality you would probably have a signed contract by then though.

Thank you for the OFT part, I wasn't aware of that although it would certainly come under common sense and fairness!

Kind regards,

John

PaulF
25-04-2008, 19:08 PM
The answer is speak with the compliance dept on 01926 496800 who will be able to guide you. That's what they are there for!

kayak
26-04-2008, 09:53 AM
Excellent - Thank you

kayak
28-04-2008, 08:46 AM
The answer is speak with the compliance dept on 01926 496800 who will be able to guide you. That's what they are there for!

They refused to help, as I am a non member.

Kind regards,

John

PaulF
28-04-2008, 13:36 PM
Sorry! I thought you were a member of ARLA.

kayak
28-04-2008, 14:25 PM
Sorry! I thought you were a member of ARLA.

No, I probably didn't make that clear mentioning ARLA so much. I am not overly interested in joining ARLA mainly due to the cost involved but I do feel that they are probably the leading 'voice' in best practices.

What I am trying to do is make sure that all of my terms are actually fair, and set down in writing although it doesn't seem like that many people really do this.

Kind regards,

John

kayak
28-04-2008, 14:27 PM
Look on the NAEA website - their code of conduct is quite comprehensive and may give you some pointers.

Here is a quick one for anybody out there that has a seperate client account for rent money - say a Lettings Agency is taking card payments using a merchants service. Say the rent is £500 and the card charge is 2%, eg £10.

£490 is therefore credited to the client account.

Would best practice be for the LA to transfer £10 from the office account into the client account to make the rent back up to £500?

Obviously you could not pass the cost of money handling on to your landlords but just wondering how agents would do this.

I don't process card payments because of the costs that you have just highlighted but there surely must be an option to charge the 2% to another account, as otherwise it would create havoc with your accounts.

Secondly, I don't see how anyone can justify not having a separate client account!

Kind regards,

John

lorenzo
28-04-2008, 14:30 PM
I don't process card payments because of the costs that you have just highlighted but there surely must be an option to charge the 2% to another account, as otherwise it would create havoc with your accounts.

Secondly, I don't see how anyone can justify not having a separate client account!

Kind regards,

John
My letting agency charges the tenant an extra 2% if using a credit card.

kayak
28-04-2008, 16:37 PM
I am in the same boat - got all the necessary PI and other insurances and have seperate client account (makes life much easier, and more complicated at the same time!) however have not yet joined NAEA/ARLA (although the paperwork is filled out and ready to be sent off, and has been for months). I do not believe there is a requirement for a letting agent to have a seperate client account (indeed took a lot of effort to get the bank to open one for us) however it would be a requirement of ARLA/NAEA.

I think it is a good requirement of ARLA to ask for a client bank account, separate from the trading account as it isn't very healthy to mix the funds! I have my client account verified by the bank as a client account and they state that they won't count money in this account against any debts if I go bust.

I would be interested to know what CMP insurance does extra to this? Is this if I run away with a lot of money, then the insurance scheme will cover it?

I only reason I would join ARLA is to put the sticker in my window, but it is an expensive sticker. It is possible to run a letting agency at a very professional level without ARLA, but how do you prove it to your clients?

I am very interested in joining my local one though (ALMA) as I think their advertising is worth it!

Kind regards,

John

johnboy
29-04-2008, 17:03 PM
You could do a few arla courses have the certs hanging on the office wall then advertise in your window you are ARLA trained and have the word ARLA in a similar colour and font, as long as you dont lie when asked wheres the harm.

kayak
29-04-2008, 17:40 PM
I'm a little confused...

Are you saying that you could complete an ARLA course, replicate their logo but not join and then kind of pretend that you are an ARLA member?

If that is what you mean then it seems like a terrible idea!

If up didn't mean that, then apologies.

Kind regards,

John

johnboy
29-04-2008, 19:32 PM
I'm a little confused...

Are you saying that you could complete an ARLA course, replicate their logo but not join and then kind of pretend that you are an ARLA member?

If that is what you mean then it seems like a terrible idea!

If up didn't mean that, then apologies.

Kind regards,

John

No i didnt quite mean that but it seems quite common pratice for non Arla agents to advertise they are ARLA trained. Which i suppose is the next best thing after a ARLA member. Just because you might choose to use red lettering as well doesnt mean you are pretending to be one. Though it it not the best example look at the supermarkets with their own brands using similer packaging to the named brands.

I am not at all sugesting anyone trys to pretend to be a member ARLA but rightly or wrongly it is respected and i dont thing there is anything wrong with stating you are ARLA trained. i know how hard it is to become a member because my company is.

Daytona
29-04-2008, 22:51 PM
Who'd want to replicate their cheesy out of date logo in any case ;)

Thers's nothing wrong with having qualification certificates mounted on the wall.

I don't think ARLA has much of a reputation in any case as they don't check their agents (other than the financial check).

The NAEA Technical Award in Residential Letting and Management is the qualification to get.

Sportingdad
30-04-2008, 07:29 AM
As a High street agent for 20 years I view Arla as a utter waste of time, just extra admin/costs with very little actual end benefits...it's for pimpley buck teeth people who lack common sense but enjoy certificates/letters after surnames.

Cards, if a tenant initially wants to pay by a credit card the very loud alarm bells should ring for any intelligent agent/landlord, why is someone paying the reservation fee etc on borrowed money ?.....the answer is to only take debit cards and decline credit cards..when looking at the card normally it will show the wording debit card however if you take payments over the phone a good way of identifiying credit cards is that 90% of long numbers will start with a 5.

The taking of cards over websites is increasing (excellent means of payment for overseas tenants/parents making initial large payments) but out of the 15 online payment processors only 1 has a facility to only authorise debit cards only as they make more banking charges out of credit cards, if your a member of ARLA give the "hotline" a call and ask who that online provider is...goodluck

agent46
30-04-2008, 08:50 AM
it's for pimpley buck teeth people who lack common sense but enjoy certificates/letters after surnames.



I had to laugh at that because whilst I've come across a few agents who know their stuff, I've also come across a lot who despite having a string of impressive sounding letters after their names, with all the NAEA and ARLA bells and whistles etc, have got themselves into a world of trouble with a tenant.

Most of that trouble has come about as a result of them being overconfident in their ability to understand and apply housing law. I suspect that this is because having passed these exams (which given the calibre of some of the people who appear to have passed them, must be reasonably easy), they feel they are now qualified as DIY housing lawyers. So rather than appreciating the limits of their learning and going to a lawyer for advice when they get into a sticky situation with a tenant, they have a crack at it themselves. As they say "a little learning is a dangerous thing."

I'm not saying all NAEA/ARLA qualified agents are like that, but I'm just going on what I've seen myself.


Just to calrify. I'm not trying to provoke an argument - I'm just giving my opinion on the matter in response to the other contributor.

attilathelandlord
30-04-2008, 08:53 AM
I'll agree with Agent46 on this one, there are very, very few agents who know their stuff when it comes to the law.

One of the reasons I don't use agents I'm afraid.

agent46
30-04-2008, 09:20 AM
I'll agree with Agent46 on this one, there are very, very few agents who know their stuff when it comes to the law.

One of the reasons I don't use agents I'm afraid.

My goodness, we've agreed twice in two posts. Is there a full Moon tonight?

Expanding on what you said - it is not that they don't know any law, but simply that they know less law than they think they do. And what law they do know, they don't seem know how to interpret or apply properly. As Socrates said "Wisest is he who knows he does not know", although he wasn't talking about Ancient Greek letting agents at the time.

attilathelandlord
30-04-2008, 09:35 AM
Blimey, I don't think I can stand the excitement!

As Confucious say, he who use agent is big fool! (said in extremely bad mock chinese accent!)

jeffrey
30-04-2008, 09:43 AM
As Confucious say, he who use agent is big fool! (said in extremely bad mock chinese accent!)
Confucius (551-479 BCE) preferred his transliterated name to have "...ius" at the end, anyway.

attilathelandlord
30-04-2008, 09:55 AM
Did he tell you that?!

jeffrey
30-04-2008, 10:36 AM
Did he tell you that?!

No, but I wanted to avoid any confucion.

attilathelandlord
30-04-2008, 10:59 AM
Ah so! Velly good.

kayak
30-04-2008, 12:35 PM
Oh dear, it would seem I won't be very popular on this thread any more being a letting agent and not a landlord!

Oh well, I shall blunder on regardless.

The original post wasn't posted to try and meet ARLA compliance to become a member, it was posted as I think they have some good ideas and I believe it is a good idea to meet some of their compliance requirements, even if you aren't going to join them. In fact, I think you need to do more than ARLA ask to really offer a good service.

I'm going to go and hide now!

Kind regards,

John

attilathelandlord
30-04-2008, 12:58 PM
I'm sure you're the exception amongst agents John! Actually my brother-in-law runs his own agency and I know he works hard to provide a good service to both tenants and landlords.

It's just there are so few good ones out there, especially it seems in London where I regualarly get called by people who can barely mumble out a few words and who want to manage my properties.

They don't realise that everything they say and how they say it is being judged.

johnboy
30-04-2008, 16:05 PM
I believe it is a good idea to meet some of their compliance requirements, even if you aren't going to join them. In fact, I think you need to do more than ARLA ask to really offer a good service.

John

I couldnt agree more. But wherever you agree or not if being a member is good or bad the fact is a % of new landlords will only go with a arla agent and it is up to the agent to make a commercial decision to decide if to become a member. For me the jury is still out,we have made some savings on insurance products and got at least a handfull more properties purely on the arla logo.

kayak
30-04-2008, 16:23 PM
I couldnt agree more. But wherever you agree or not if being a member is good or bad the fact is a % of new landlords will only go with a arla agent and it is up to the agent to make a commercial decision to decide if to become a member. For me the jury is still out,we have made some savings on insurance products and got at least a handfull more properties purely on the arla logo.

And I agree with you...if it shows landlords that you are actually conforming to their code of practice then maybe it is money well spent.

Kind regards,

John

kayak
30-04-2008, 16:25 PM
I'm sure you're the exception amongst agents John! Actually my brother-in-law runs his own agency and I know he works hard to provide a good service to both tenants and landlords.

It's just there are so few good ones out there, especially it seems in London where I regualarly get called by people who can barely mumble out a few words and who want to manage my properties.

They don't realise that everything they say and how they say it is being judged.

Well I didn't start my agency to be the same as the other letting agents around. As I'm sure many other agents appreciate it is a lot harder to build up long term good contacts and to prove yourself rather than to make a 'fast buck' by ripping a few people of.

The name Maverick wasn't by accident!

Kind regards,

John

becsug
04-05-2008, 06:01 AM
Cards, if a tenant initially wants to pay by a credit card the very loud alarm bells should ring for any intelligent agent/landlord, why is someone paying the reservation fee etc on borrowed money ?.....the answer is to only take debit cards and decline credit cards..when looking at the card normally it will show the wording debit card however if you take payments over the phone a good way of identifiying credit cards is that 90% of long numbers will start with a 5.

The taking of cards over websites is increasing (excellent means of payment for overseas tenants/parents making initial large payments) but out of the 15 online payment processors only 1 has a facility to only authorise debit cards only as they make more banking charges out of credit cards, if your a member of ARLA give the "hotline" a call and ask who that online provider is...goodluck

16-digit card numbers that start with a 5 are issued by MasterCard, and are indeed almost always credit cards. MasterCard's debit cards are usually Maestros starting with a 6. But Visa has a large portion of the credit card market, too, of course. Their cards are prefixed by a 4, but, confusingly, their debit cards use a 4 also. To clarify which is being presented you can try calling Visa International or MasterCard International, both of whom can usually confirm the issuer as well as the particular type of card.

Not the major point of this thread, I know, but perhaps it can help?

Becky