If your investment property manager doesn’t do this, change them now!
There’s a misconception – an investment property management myth if you like – that tenant and landlord money are protected by law. It isn’t. We have client money protection, which protects client money. It’s part of our business model and good working practice. But it’s surprising how many agents and investment property managers don’t.
If your current property manager finds tenants and collects rent from tenants, you should call them now to make sure they have similar protection. If they don’t, my advice is to switch to one that does. Why am I writing about this? Because I was astounded to discover on a recent episode of ‘Nightmare Tenants, Slum Landlords’ that there are still agents who don’t protect their client money.
A rogue agent – subletting and stealing
The events highlighted by the NTSL episode shows how important it is to ensure that your chosen letting agent has client money protection. The property investor, Doni Soeyono, sunk his savings into a buy-to-let property investment opportunity. But he didn’t want to manage the property himself. He was a property investor, not a landlord. A wise decision.
However, the agent he selected wasn’t quite what he had been led to believe. It wasn’t long before Doni found himself chasing the agent for outstanding rent. If the rent was paid, it was paid late. The agent ignored any requests for information. Still, at least the tenants had been vetted properly, so Doni had some security there. Wrong!
Not only had the agent made little or no effort to vet the tenants, Doni discovered that his investment property was being sublet on a Romanian website. The agent (and therefore Don, too) didn’t have a clue who was living in the property. Worse still, when the tenant was asked to leave, they made it plain that there was no way they would go without a fight.
The agent takes a hostage!
Eviction Specialist Paul Shamplina, the founder of Landlord Action, visited the agent to discuss their failings. He wanted to find out why the agent had failed to properly vet Doni’s tenants, and what the score with the rent was. He asked why the agent hadn’t been passing on the rent to the landlord.
It was when the story took another unexpected turn of events. Paul Shamplina was taken hostage, and locked in the agent’s office! Eventually, Landlord Action recovered the rent that hadn’t been passed from the tenant to the landlord. Fortunately, Paul Shamplina was freed. Unfortunately, evicting the tenants wasn’t so easy. Doni Soeyono was left with long and expensive court proceedings to get back his buy-to-let investment property.
Beware if an agent doesn’t have client money protection
Even though you may not think so, the landlord, in this case, was lucky. At least he got his rent paid – eventually. Many other landlords who had signed with the same letting agent lost thousands of pounds in unpaid rent when the agent declared bankruptcy. And, just like Doni Soeyono, they’d had unknown tenants who they’d had to evict. Those tenants lost their deposits.
Mr Shamplina said, “It is so important that landlords and tenants ask their agent if they have Client Money Protection (CMP) Insurance so that if the business closes, their money is protected. If the answer is no, do not use them. There is a common misconception that landlord and tenant money is protected by law (YouGov Poll) but this is not the case, so the sooner CMP is mandatory, hopefully, next year, the better.”
We couldn’t have put it better ourselves.
Our promise to you
Here at Ezytrac Property Group, we ensure we know your tenant. We undertake rigorous tenant vetting. We ensure that tenant deposits are held in suitable, accredited tenancy deposit schemes. And, as a member of NALS, we not only meet (and beat) required standards of customer service but also have in place insurance to protect client money. Contact Ezytrac today on +44 1522 503 717 and ensure you don’t become the next Doni Soeyono.
Yours in effortless property management,
Brett Alegre-Wood MARLA MNAEA