Landlord seeks to recover all money owed after property scheme agent fails to pay £150,000 in rent

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The Property Redress Scheme has expelled a guaranteed rent operator after it failed to pay an eyewatering £150,000 in rent to a former landlord client.

It has been ordered to pay the landlord £25,000, the maximum it can award, and has now been removed from the scheme, while the landlord plans to try and recover the amount owed through the courts.

Financial loss

The case involved rent to rent arrangements for eight properties, which the agent struggled to fill due to the pandemic. The landlord agreed to reduce rent payments during Covid when some of the properties were empty, but the agent failed to revert to full rent when these temporary arrangements expired and the properties were occupied and sub tenants were paying rent. The agent was also found to have used an unregistered handyman following a gas leak, resulting in the landlord reporting the incident to Gas Safe and the HSE. This all amounted to a significant financial loss for the landlord.

Sean Hooker, head of redress at the Property Redress Scheme, says: “Guaranteed rent, or rent to rent, operators are becoming more and more common in the private rented sector, as it offers a lower barrier to entry into the property market. Whilst there are reputable operators who have been providing the service for many years, there is a significant proportion of the market who are less experienced and need to make sure they fully understand their obligations and responsibilities.”

Tread carefully

The Property Redress Scheme has reported a 43% increase in complaints relating to guaranteed rent since 2018 including loss of rent, damage to property and sitting tenants.

Paul Shamplina, founder of eviction specialist Landlord Action, adds: “If the rent to rent arrangement is not carried out diligently the landlord loses control of what is happening at the property and this is where the problems begin. With many years’ experience of dealing with evictions I would advise any landlords entering into such an agreement to tread very carefully.”

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