UK Landlord Forum / Life

Hi,

I have just discovered that my letting agent (who manages my properties) is charging commission on the work that contractors (builders, plumbers etc) do on my properties. Thus if I get a plumber in to do a minor repair, the agent will charge the contractor a percentage of the cost of the work done.

I have only just discovered this as it was not made explicitly clear to me in the terms and conditions when I signed with this agent.

However it is my very strong belief that the agent has not done anything to ensure that the contractors have not simply charged me more for the work they do, in order to pass on to this extra commission to the agent. I have asked them and they say they haven't done any checks to make sure this wasn't happening and have no system in place to prevent it.

Firstly - given that they are taking these backhanders, do you think the words in the small print are fair and explicit enough to explain what they have been doing? Also can I reasonably expect that they tell me what these payments are, who they are paid to and how they are levied (as a flat fee or a percentage of the work that I have asked to be done)? They are registered with the Property Ombudsman which has this requirement:

"14b You must tell your client in writing as soon as reasonably possible when you find out about circumstances that give rise to a conflict of interest. This would include where you or any connected person own, or have a financial interest in, a business or contractor engaged to provide services to a client".

Would it be fair to say that, if they are getting these payments from these contractors, that that constitutes a "financial interest" in those contractors?

I'd also love to know if anyone else has this situation with their managing agents!

Thanks v much.

I'd expect that most managing agents "enjoy" some form of conflict of interest with their customers.

In fact it's built in to the model - letting agents benefit from exactly the situations that a landlord would prefer to avoid,
start and end of tenancy and (as you are finding) repairs and maintenance.

In this case it's been covered by the contract, which is at least above board.

If you want to pursue it, the angle I'd look at is less the conflict of interest and more the specific contract wording.

You are entitled to ask specifically how the agent is
"satisfied" ...that the service provided is ... no more expensive than other similar local services"
AND
"satisfied"..."that your interests are not adversely affected".

If they are not "satisfied" that both cases are the case, they are not entitled to "accept the commission".
And being "satisfied" requires at least some effort on their part.

However, the result of that is that they should give the commission back, not sort out anything in your favour.

I'm not sure there's any way forward other than by not using an agent to do this kind of thing.

I am pretty sure the financial interest is specifically to stop Mrs Agent getting her son the plumber and her daughter the Decorator in to do your work, and if they do they have to be explicit to you about the relationship.

The commission is just them getting paid for sorting out the work to be done.... yes you would rather think that was covered in the additional fees to fully manage your place!

As has been suggested if you are not happy with them generally, be awkward and ask for proof, if however they are doing a decent job, let that dog sleep my man, they are all shit so it's no point threatening to go elsewhere.

Do you really think that the LA loves you so much they will  arrange the contractors for nothing?
TIP:- If at all possible, diy, or be prepared for someone to charge you for doing it.

Quote from: fishpond on March 17, 2014, 02:00:04 PM
TIP:- If at all possible, diy, or be prepared for someone to charge you for doing it.

That's enough about you sex life!

Quote from: fishpond on March 17, 2014, 02:00:04 PM
Do you really think that the LA loves you so much they will  arrange the contractors for nothing?
TIP:- If at all possible, diy, or be prepared for someone to charge you for doing it.

I find it very odd that you assume that I would expect them to arrange contractors for nothing. I expect them to do it for the fee they quoted for doing the job; the percentage of the rent they charge as the managing agent fee. It doesn't feel too demanding to expect that I be told if they are making more out of me than that without explicitly telling me!

Welcome to the penny pinching world of letting agents.
As I have said diy if possible.
Have you got the time and the means to take the letting agent to court, if so please let me know the result.