Mistakes by Letting Agents
Letting Agents owe a duty of care in Tort and Contract to their clients, who in most cases are Landlords, to not cause them financial loss by their own misdoings. Should a mistake by a Letting Agent lead to financial loss, the Letting Agent may be liable to their client for that loss.
Contractual duties may be made expressly between the parties by the letting agency agreement, or in absence of any agreement, they may be implied by common law or statute.
One of the main statutory laws to which Letting Agents must comply is Section 13 of the Supply of Goods and Services Act 1982. This Act states that any service must be provided with reasonable care and skill. Therefore, in undertaking any tasks, the Letting Agent must act with due care and skill to not cause their client a financial loss.
It may also be possible to imply contractual terms based on business efficacy. In this instance two of requirements a Court would consider is if the term is reasonable and equitable, and if it is necessary to give business efficacy to the contract.
Examples of acts or omission by a Letting Agent that may amount to a breach of either a tortious or contractual duty are the following:
- Failing to undertake anti money laundering checks
- Failing to undertake identification checks
- Failing to collect references
- Failing to confirm the financial standing of the tenant
- Failing to find tenants
- Failing to manage the tenancy
- Failing to collect rent and failing to collect the relevant tax owed by Non-Resident Landlords
- Failing to provide safety certificates and the Energy Performing Certificate
- Ensuring deposits are placed in a scheme such as Deposit Protection Service, My Deposits or the Tenancy Deposit Scheme
- Undertaking a Legionella Assessment, and ensuring Smoke Alarms and Carbon Monoxide Monitors are fitted in the property
- Failing to act in the best interests of their clients
Common law duties have been implied in the case of Mendoza & Co v Bell [1952] 159 E.G. 372 where the court found an implied term that the agent would use his best endeavours to bring about a sale.
The reason why the Court places such duties is to ensure that Letting Agents take care in selecting and placing tenants, and to ensure they take all measures to avoid selecting problem tenants.
Problem tenants may go on to cause damage to property or inconvenience to the Landlord, for example by not paying their rent or harassment. They may also refuse to leave the property at the end of the tenancy, causing the Landlord financial loss in attempting to extricate the tenant.
Landlords often rely on their properties to provide an income. It is vital the Letting Agent only allows suitable tenants to live in their client’s property by undertaking the necessary checks prior when placing the tenant.
Specters Solicitors have acted for a number of Landlord clients against their Letting Agent who have caused them a financial loss by failing to comply with either their contractual or tortious duties.
