Complaints against letting agents up 44% in a year - Property Ombudsman

More than 110 people complained about problems with letting agents each week during the second quarter of the year, the Property Ombudsman said today.

The Ombudsman Christopher Hamer received a total of 1,446 enquiries from people asking for help with letting agents during the three months to the end of June.

The figure was 44% higher than during the same period of 2008, with complaints about lettings now a third higher than those about property sales, which fell by 30%.

But the ombudsman was only able to look at 807 of the disputes about letting agents as the rest were outside of his jurisdiction because the agents did not belong to the scheme.

It is compulsory for estate agents to belong to a redress scheme, with 10,400 sales offices registered with the Property Ombudsman, but letting agents do not face the same requirement, and only 6,255 lettings offices have signed up to the scheme on a voluntary basis.

Mr Hamer said: "Enquiries over lettings disputes now far outstrip those for sales and this is one of the principal reasons for asking the Office of Fair Trading to ratify the Property Ombudsman Lettings Code of Practice under its Consumer Codes Approval Scheme.

"We see this as the first step towards the time when all lettings agents must be legally required to sign up for a redress scheme.

"My message to consumers in the lettings market is that they should only use agents who are covered by the Property Ombudsman scheme and are therefore following the standards in our Lettings Code of Practice."

The main complaints about letting agents from landlords related to agents failing to check references for tenants and not carrying out regular inspection visits on properties, while tenants complained about not getting their deposits back.

The ombudsman also looked at 866 disputes involving estate agents during the quarter, out of a total of 1,076 complaints, the rest of which were outside of his jurisdiction.

He called for estate agents to take greater care when explaining their fee structure to homeowners to ensure that people were fully aware of what they were signing up to.

He warned that while he would not re-write contracts that were lawful, where there was evidence of "deliberately induced confusion in the mind of the consumer" he would make an award to compensate them for their loss.

Mr Hamer said: "I am regularly presented with scenarios where the fees, although stated in the agreement, have been clouded in some way either during substantiated conversations during the market appraisal or through some ambiguity in the wording of the contract.

"I have seen cases where the agent has operated a fixed fee basis but it was clear from the evidence presented to me that the charge was portrayed as a percentage of the selling price and sellers therefore rightly assumed that it related to the achieved sale price."

In one case an estate agent sold a property for £220,000, but charged a fee based on the asking price of £300,000, despite the fact that this was £50,000 more than the price two other estate agents had said they would market the property at.

The agent had offered the vendor £500 in recompense, but Mr Hamer awarded them £1,304, putting them back in the position they would have been in if the fee had been based on the property's sale price.