As the case has such strong implications for the industry, EYE invited all three parties involved – TPO, the letting agent and the referencing firm – to comment.
A spokesperson for The Property Ombudsman, which rejected the landlord’s complaint, told us: “The Property Ombudsman scheme did review this complaint in June last year but it was not upheld.
“A judgement was made on the evidence presented and that included that Blue Sky Property undertook the further referencing checks that LetsRisk (LR) recommended.
“Our stance has always been that agents can rely on a third party referencing provider who in this case deemed the tenants to be acceptable.
“The Ombudsman is not a regulator and does not have the authority to take regulatory or legal action against an agent; we are an alternative dispute resolution service.
“Our case review concluded that the complainant (landlord) could take further action and seek payment of an award by alternative means, such as the small claims court. The landlord did just that and the court has found in her favour.”
LetRisks merged with Landlord Hub last August and the combined businesses now complete over 20,000 referencing checks a month. In January, it announced a new long-term agreement with Leaders, which has over 100 branches.
Director Michael Portman, who founded LetRisks, yesterday evening told EYE that any reference was a snapshot in time, and that things could then change after the start of an agency,
He made other points, saying: “The case acts as a useful reminder to agents (who meet and interview the tenants face to face) and referencing companies (who don’t meet the tenants, and verify the data supplied) in their duty to landlords.
“It is ultimately the landlord’s decision to rent to the tenant, based on the information gathered by their agent in referencing and at interview.
“The Property Ombudsman code of practice is clear: ‘The agent remains duty bound to consider the results and highlight any potential areas of concern to both the landlord and tenant to allow both parties to make an informed decision’.
“The fact that there are over 20,000 claims for possession in the courts each year in England and Wales is proof that you don’t always get perfect rent-paying tenants.
“Letting property carries risk, and sometimes the relationship between the tenants breaks down, resulting in the rent not being paid.
“The Property Ombudsman considers that no amount of referencing could predict the change in a tenant’s personal circumstances.”
EYE has been unable to contact the agent, Juliette Maytham, for an on-the-record comment but will of course carry any statement from this ARLA firm.
Comments (6)
The agent should have read the details of the reference and picked up on the CCJ that the tenant hid – as a landlord I would have rejected the tenant at that point for trying to deceive me.
A check of the bank statements would also have shown that the claimed employment income was not coming in.
Nice try, Greg, but when something similar happened to us a few years ago, the fuzz had absolutely zero interest in pursuing scamsters as in their view no-one is hurt in an attempted fraud (except in our case we kept the applicant’s fees…;)
Sounds like a fraudulent application to me. We the police interested – I doubt it.
Sorry, but does the report on the case in the other article not say the job was “fictitious” and the confirmation of earnings came from the a relative? Therefore, whilst I fully agree circumstances can change, I cannot see this is a case about a change of circumstances. The article implies the agent “made the decision” to rent to the tenant, so perhaps referring the decision to the landlord might have helped. One also wonders if any wording in the terms of business (like the referencing company) could have reduced liability? I think the most interesting point is probably the difference between the ombudsman and the court. I would have credited the ombudsman with a lot more expertise in this sort of area and I would have thought the support of the ombudsman would have been a sign that the agent had acted in accordance with the reasonable standards of the industry (ie not negligent), especially as this is a statutorily appointed ombudsman that agents are required by law to join (in England at least).
I feel sorry for Blue Sky and perhaps one needs to know all the facts, but I actually think the Ombudsman was wrong here. Had the agent discussed the situation of the references with the landlord and documented that conversation, then they would have been in the clear. Taking the initiative left them exposed.
I always say to landlords, “Referencing is like an investment. Past performance is not a future guarantee. They are only as good as the day they are undertaken and go out of date immediately.”
As an agency we do turn people away after discussion with the landlord, even after passing referencing, if we have a feel that there may be an issue in the future. And we return their reference monies in full too.
Personally I’d rather stump up £40/50 paying the reference company myself and nip it in the bud before we start, than tie up resources in the future and have a disgruntled client.