Property: Constantine Place, Baldock, SG7 6ST
Service Highlighted: Professional Management and Advocacy
Background
The property in question was inherited by the landlord from their grandmother and served as a sentimental yet practical source of additional income. With no prior experience in property management, the landlord became an “accidental landlord,” choosing to delegate responsibilities to a professional letting agent for peace of mind.
The agent managed the property, letting it to a couple whose combined income met affordability criteria. Additionally, due to a County Court Judgment (CCJ) against one of the tenants, rent was paid 12 months in advance to satisfy referencing requirements.
However, cracks in the arrangement emerged when the tenant’s partner moved out after the first year and the agency issued a 12-month renewal in the sole tenant’s name without rechecking affordability or securing additional safeguards. This oversight placed the landlord in a vulnerable position.
The situation
The landlord approached us after the tenant began paying rent late and in instalments. Upon investigation, it became apparent that the previous agent had failed in several key areas:
- Referencing Oversight:
The tenancy had been renewed for 12 months without rechecking the tenant’s financial situation or confirming affordability. This was critical, as the original agreement relied on both tenants’ incomes to meet affordability thresholds. - Invalid Rent Guarantee Policy:
The landlord had been paying for a rent guarantee policy through the agent. However, due to the agent’s failure to reassess the tenant’s financial standing during the tenancy renewal, the policy had become invalid, leaving the landlord without protection. - Limited Options for the Tenant:
With a CCJ and insufficient income, the tenant was at risk of financial difficulty and would struggle to secure alternative accommodation. Their only realistic option, if evicted, would be to approach the council, which often advises tenants to remain in a property until evicted through the courts to qualify for priority housing.
This situation placed the landlord at significant risk, both financially and legally, due to the failings of the previous agent.
What we did
When we took over the management of the property, we immediately began working to stabilise the situation and protect the landlord’s interests:
- Engaging with the Tenant:
We reached out to the tenant to assess whether they could pay rent 12 months in advance again or provide a guarantor. Unfortunately, neither option was viable. - Monitoring Closely:
Instead of renewing the tenancy, we allowed it to roll onto a periodic tenancy. While the tenant occasionally paid late and in instalments, they were never more than a couple of weeks behind on rent. We monitored payments closely and maintained regular communication with the tenant to prevent arrears from escalating. - Reviewing Landlord Documents:
On reviewing the landlord’s paperwork, we identified that the rent guarantee policy sold by the agent was invalid due to their failure to reassess references during the tenancy renewal. - Advocating for the Landlord:
We assisted the landlord in filing a formal complaint against the previous agent, highlighting their failures in referencing and mis-selling an invalid rent guarantee policy. When the agent refused to resolve the issue, we supported the landlord in escalating the case to The Property Ombudsman. - Achieving a Positive Outcome:
The Property Ombudsman ruled in favour of the landlord, ordering the agent to refund the cost of the rent guarantee policy and awarding £716 in compensation for their failure to carry out proper referencing during a significant change to the tenancy.
Key takeaways for landlords
- Thorough Referencing is Critical:
Significant changes to a tenancy, such as the departure of one tenant, must always prompt a reassessment of affordability and suitability. - Carefully Review Insurance Policies:
Rent guarantee policies are only valid if the terms of the tenancy and referencing meet strict criteria. - Professional Advocacy Matters:
Our expertise ensured the landlord not only resolved the immediate issues but also held the previous agent accountable for their failures.
Ready to take control of your property?
“This case highlights the importance of proactive property management and having a team that advocates for your interests. At M A S O N S, your trusted letting agents in Baldock, we ensure your property is managed professionally and your investment is always protected.”
Contact us today to see how we can help protect your investment and ensure your property is in safe hands.
