LATEST: Ombudsman reveals shock case of cash payment hidden from landlord by agent

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TPO has ordered the agent to return the cash, which was paid by a council as an incentive to give one of its tenants a home within the landlords’ property.

A letting agent who kept a £2,500 council ‘tenant finder’ sweetener hidden from a landlord has been ordered to hand the cash back by The Property Ombudsman (TPO), one example of a rising number of complaints by landlords against agents revealed in its annual report.

The landlord
had instructed the agent on a full management basis who then suggested it try
using the incentive scheme run by the council – but failed to mention anything
about the payment.

When the
landlord complained, the agent replied, “the claim of dishonesty will continue
to fall upon deaf ears”.

TPO has ruled that the incentive payment formed part of the tenant’s offer to rent the property and that agents must not make ‘secret profits’.

It said: “If such a sum is to be charged (or kept), then failure to tell a landlord about this could constitute a misleading action or omission likely to affect their transactional decision and could therefore be an offence under the CPRs (Consumer Protection for Unfair Trading Regulations).”

Complaints

The way agents
dealt with complaints was again in the top three causes of complaints for
lettings, according to the Property
Ombudsman’s annual report.

Management, communication and record keeping, and tenancy agreements, inventories and deposits
were also cited by complainants, 50% of whom were landlords.

The report reveals that TPO dealt with 2,518 complaints relating to lettings – up 2% on the previous year – making the biggest award of £17,644. Last year, 67% of complaints were supported by the Ombudsman, which made an average award of £635.

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