Corrupt letting agents are preying on landlord and tenants who are often unaware they could lose their cash if the business closes, according to the Royal Institution of Chartered Surveyors (RICS).
The surveyor trade body claims the lettings industry is unruly and uncontrolled in a call for the government to introduce strict regulations to protect consumers.
In a report, RICS explains letting agents can set up shop without any qualifications, experience and without any need to register with any regulator.
The risk is the business can close overnight, leaving landlords and tenants thousands of pounds out of pocket.
For instance, Helen Gregory, who ran Beechwood Property Portfolio in Matlock, Derbyshire, has written to local media pledging to deal with customer complaints after some of her landlord and tenant clients found they could not reclaim deposits allegedly protected by The Deposit Protection Service (DPS).
DPS confirms some deposits were never received, despite tenants claiming they were paid to the letting agent.
The report from RICS found 87% of landlords and tenants want compulsory regulation for letting agents.
Although the poll found 92% of tenants were satisfied with their lettings agent, two thirds had no inventory when moving in to a private rented home, showing worryingly low standards, said RICS.
The report also revealed:
- 89% of landlords and tenants would like a regulator to enforce compulsory registration for letting agents
- 93% would also like the regulator to enforce a lettings industry code
Around 80% of private renters believe compulsory regulation would:
- Offer better protection for landlord and tenant money (89%)
- Give everyone a better understanding of what to expect when letting a private home (83%)
- Lead to more trust between consumers and letting professionals (80%)
- Give consumers a better standard of service (84%)
“Choosing the wrong agent can result in tenants encountering all sorts of problems such as lost deposits, broken agreements and excessive charges,” said Peter Bolton King, RICS Global Residential Director.
“What we would like to see is the government taking direct action on this and introducing a single regulatory and redress system for both sales and lettings agents to make sure they are fully accountable. Until this happens, we recommend that tenants use an lettings agent that is a member of a professional organisation.”