Switching letting agent – All you need to get it right
As a landlord, when you use a letting agent to find a tenant – and particularly if you have a ‘fully managed’ service, where they look after both the tenant and the property on your behalf during the tenancy – there’s a lot of trust involved.
You’re relying on your letting agent to:
- Find a ‘good’ tenant who can and will pay the rent in full each month, and who will treat your property well
- Ensure both the tenancy and the property comply with all relevant legislation
- Communicate well with you about the let and keep you updated on any legal changes that might affect you
- Manage inspections, maintenance and repairs, and fix any problems quickly and cost-effectively on your behalf
- Manage rent collection each month and deal with any arrears that may occur
- Handle any change of tenancy so that void periods are minimised and the property continues to be let at a fair market rent
- Advise you when rent increases might be possible and if/when upgrades or changes might be worthwhile
Your rental property may be one of your biggest financial assets, and it’s important that it’s let and managed well. Your agent should be working to ensure constant and consistent rental income, so that your costs are covered and, ideally, you’re left with some profit on top. And they should also be advising you to ensure that the property itself is kept in good condition so that your tenant has a safe and comfortable home, and the capital value is protected.
If any of that isn’t happening, and your agent is falling short of your expectations, you might be thinking about switching. You may also feel that the many recent changes in legislation mean you want an agent to manage the property for you. If you aren’t a fulltime landlord this is advisable as managing your property part time is not for everybody and you could easily fall foul to recent legal changes, which could be very costly and result in criminal proceedings.
But what’s the best way to do that?
Here’s our handy guide to making the transition from one letting agent to another or changing from self management to fully managed, as smooth as possible.
- Check the terms of your agreement with the agent
If you’re only using the agent to find a tenant, giving them notice should be fairly straightforward. But if you have a fully managed service, there will often be an initial tie-in period, and you might not be able to switch immediately unless the agent has breached their obligations in some way – however, see point 3! The agreement will also state how it can be terminated by either you or your agent and the notice you need to give. Remember your tenant may not be keen to deal with another agent or with you directly and they will also need to be given notice of any change that occurs.
One important thing to note is that it’s common to have a clause that states you’re obliged to keep paying fees to the agent for as long as the tenant they introduced is living in your property. That’s something you may need to discuss with your new agent, to make sure switching doesn’t mean you end up paying two sets of management fees!
- Find a new agent – before you give notice!
Unlike switching estate agents, where it might not matter too much if it takes a few weeks to find a new agent to sell your home, if you have a tenant in your property, you need to make sure they remain properly managed.
There are a lot of systems and processes involved in successfully managing a tenancy, as well as a good understanding of lettings legalities. So, if you can make sure you have a new agent ready to take over, they should be able to manage the handover so that nothing gets missed.
Some key checks to make on any new agent:
- Do they have Client Money Protection insurance? (legally required)
- Do they have membership of a redress scheme? (legally required)
- How do they stay up to date with legal changes?
- Are they successfully letting and managing properties like yours?
- Do they have an attractive website and good-quality marketing?
- How do they handle rent arrears and deposit negotiations?
- What are their fees, particularly tenancy renewal costs?
These things should give you a good idea of how professional they are and how well they would manage your property and tenant. Then the final point on your checklist is: do you like them? These are the people who you and your tenants will be dealing with for the foreseeable future – possibly years – so it’s important that you like their approach.
Once you’ve found the agent you’d like to move to, it’s time to give your current one notice.
- Explain to your agent why you want to leave them
The best resolutions tend to come from having an open and amicable discussion, so make sure you’re clear about your reasons for wanting to switch – it’s often helpful to make a list ahead of having a conversation – and explain them to your current agent. If they agree that things haven’t worked out, they may be prepared to negotiate over any contractual tie-in you might have. For example, if their tenant is still in the property, you could try to reach an agreement to pay them a one-off ‘introduction’ fee, rather than having to keep paying them every month until the tenant leaves.
Importantly, check they’re happy to pass on the tenancy file – including things like tenant referencing information, deposit protection details and gas check certificates – to your new agent, and that they will contact the tenant to ensure a smooth handover with rent payments etc.
Whatever you agree with your agent, make sure it’s confirmed in writing.
Remember, it’s a legal requirement for every letting agent to be a member of either The Property Ombudsman or the Property Redress Scheme, which offer independent third-party dispute resolution. So if you’ve already spoken to your agent about why you want to leave – and put it in writing – and they don’t resolve things to your satisfaction, you can then take the matter to whichever redress scheme they belong to.
And then the final step is to engage your new agent. Be honest about why you’re making the move to them, and be clear on your expectations of their service. In our experience, a successful relationship between a landlord and their agent depends on good communication, so start as you mean to go on!
If you’re thinking of switching from your current agent, we’d love to hear from you. We can discuss the levels of service we offer and help you find the right letting and management solution that fits with your aims as a landlord.
Call us today on 01271 410108 or email email@example.com, and we’ll be happy to arrange a discreet and confidential chat.
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