Letting Agent's Responsibilities

07 August 2023

Agents Obligations to Landlords

As there is no legislation directly covering a letting agent’s relationship with landlord clients, applicants and tenants, common law guidance and ethical codes of behaviour are very important. Ethics are defined as ‘moral principles that govern a person’s behaviour or the conducting of an activity’. Under common law, agents have the following duties towards landlords:

• To make them aware of the agent’s services and fee details before any business transaction commences
• To make them aware of the landlord’s statutory and contractual obligations
• To maintain a separate client account
• To take up sufficient references on the applicant
• To manage the property in line with the agreed terms of business
• To keep keys secure and not compromise security of the property.

Agents must also ensure that they act on their client’s instructions regarding viewings and they should provide feedback after each viewing.

Agents Obligations to Tenants and Applicants

Agents have a duty of care towards tenants, event though they do not have a contractual relationship. The duty of care includes:

• Advising on key attributes of the property
• Providing applicants or tenants details of all charges at the point when they could cancel the agreement without penalty
• Advising on who holds the deposit
• Ensuring that applicants understand tenancy agreements and processes and have the opportunity to take advice or ask questions before signing
• Provide gas safety records.

Codes of Practice

Best practice should underpin all dealings with landlords, applicants and tenants. Members of professional bodies, such as the:

• National Association of Estate Agents (NAEA)
• Association of Residential Letting Agents (ARLA)
• Royal Institution of Chartered Surveyors (RICS)

or those who are members of the National Approved Letting Scheme (NALS) are bound by their prescribed codes of practice. Codes of practice generally ensure that agents are run in line with legislation and exercise best practice consistently.

Letting agents are encouraged to belong to an independent redress scheme (e.g. The Property Ombudsman’s (TPOs) scheme) and this is mandatory for members of NAEA and ARLA. This is likely to become mandatory for all under legislation. Any breach of their requirements may result in an agent having their membership taken away.

These bodies are committed to ensuring their members maintain the highest standards in the industry. Anybody unhappy with an agent’s activities can register a complaint with the professional body concerned.

Agents are required to be ‘transparent’ in their transactions with landlords, applicants and tenants.

Personal Interest and Connected Persons

As per best practice, agents must ensure that they advise all parties as soon as possible in writing if they have a personal interest in the property in question. They should also disclose anyone who could be considered to be a ‘connected person’ to the agent or agency.