With so many dip-shit letting agents parked on our high-streets, the odds of ending up with a dud is always a likely outcome, and unfortunately it’s the risk us landlords take when using letting agents to manage our tenancies. Needless to say, finding a worthwhile letting agent can be a tiresome game of trial and error.
Sadly, the vast majority of landlords that should change their management company in a heart-beat, simply don’t. It’s the “hassle” of it all. It’s just easier to suffer in silence, right?
Yes, yes, yes, I’ve come crashing into this topic like a bull in a China shop by taking hefty swings at agents, even though I do appreciate that landlords don’t always seek to pull off the old switcheroo because of a sour experience. However, the reality is, that’s usually the reason for why most landlords start looking at their options.
Just to clarify, this blog post is going to make the assumption that you need or want a letting agent to manage your property, so I’m going to focus on your options when it comes to changing your letting agent, as opposed to kicking agents to the curb all together.
Common reasons for finding another agent
Here’s a list of common reasons for why landlords want to change their letting agent:
Yup, probably the most popular reason for contemplating a switch is when you realise you’re having your pants pulled down on fees!
It’s particularly jarring at the end of the tax year, when you’re filing your tax returns, and you realise how much is being spent on management fees for relatively little work.
Some landlords pay a staggering 15% (of their annual rental income), and the only service they received was a couple of coordinated repairs. And that’s actually being generous, because much of the time all agents actually do is sit on their asses and systemically transfer 85% of rent to the landlord after they systemically received it from the tenant.
Of course, it’s not the agents fault they had F-ALL to do, but it’s not exactly value for money, is it?
If this is the reason for wanting to change letting agents, it might be worth having a frank discussion with your agent before making any brash decisions, because they might be prepared to lower your fees in order to keep your beautiful face on their customer list.
If anyone is interested, here are some cost-effective fully managed online letting solutions, which might actually be the ticket you’re looking for if saving money on agency fees is your primary objective.
While expensive fees is the most popular reason for “contemplating” a switch, receiving poor service is probably THE main reason for why landlords actually take the plunge and jump ship.
“Poor service” can include a vast array of short-failings, including poor communication, unprofessional service, inadequate service, poor/rude attitude, and often, a complete lack of knowledge etc.
I always say there’s usually no smoke without fire, so there’s definitely a reason for why letting agents get such a hard wrap, and it’s usually because of the piss-poor service that’s provided as default.
Failing to fill tenancy (i.e. find tenants)
Granted, this reason can rightly fall under “poor service”, but it deserves it’s own stage.
I’ve used a letting agent before that not only generated very few enquiries, but the ones they did rummage together, evidently from the bottom of a dumpster, were total bullshit. The applicants they short-listed literally couldn’t have been more polarising than what I asked for; I filled in a multi-choice questionnaire they provided me, so they had a good understanding of the kind of tenant I was after. Needless to say, that was a complete waste of time!
If I asked for a 10ft tall working-professional with one-arm, they would have returned with a 2inch unemployed octopus.
The results they produced were so laughable that I started questioning the desirability of my property – maybe no one wanted to rent my property apart from circus animals – even though I was initially sure the location and condition wasn’t an issue.
Thank God I used my better judgement and gave my agent the middle-finger and found a rival supplier, because with in 2 weeks I was inundated with better quality leads, and ended up choosing a Surgeon that worked at the local hospital.
So, should you sack your letting agent?
Obviously I can’t answer that for you, but I do have a few thoughts on the matter, which may give you some guidance…
- Don’t make any rash decisions if there isn’t a clear cut reason for why you want to change agents, so in this case, consider all the pros and cons of your current agent and work from there. Specifically consider how your life/finances would change with or without their services.
- Good letting agents are ridiculously difficult to find, so if you currently have a good one, and your only incentive for changing is to save a couple of hundred nuggets, I would think carefully before pulling the trigger!
If you’re going to save a significant amount, then that’s another discussion altogether.
- If you’re adamant you’re being ripped off, or you’re generally dissatisfied with the ongoing service you have received, then you should definitely consider dumping the chumps.
PLEASE!! Change your letting agent when you should!
My biggest plea to all landlords that want to change letting agents for the right reasons, whether it be for a better deal or better service, or any other justified reason, is not to hesitate!
I know the thought of change can feel queasy, especially when it seems confrontational (I’m not saying the process will be, but that’s the perception), but believe me, you’ll feel so much better for it.
The barrier is, though, that we humans are conditioned to making excuses, which ultimately only delay the inevitable and consequently end up costing us more.
A prime example: I always tell landlords to start taking the appropriate steps as soon as tenant falls behind on rent, and not delay for any reason. The odds are, when a tenant falls into arrears, they’re very unlikely to recover. I’m not saying a landlord should evict a tenant as soon as they fall into arrears, but I am saying a landlord should start preparing for the worst, and drown out any excuses provided by the tenant.
Similarly, if you’re contemplating the idea of changing agents because they’ve proven to be the premier provider of bullshit service at extortionate prices, don’t expect the situation to magically improve.
Don’t hesitate to obtain better!
Before changing letting agents
As said, most landlords spring backwards from the idea of changing agents because of the “hassle” factor. However, the reality is, changing letting agent can be relatively straightforward and a hassle free experience for both landlords and their tenants.
First step: Check your contract with the agent
There’s a good chance you might be tied into the initial fixed term period with their current letting agent, which is typically 6 – 12 months. Generally speaking, you can’t switch agents with in the fixed period unless there is either a break clause (which is very unusual in these circumstances), a mutual surrender of contract, if the agent breached the terms of the contract, or extenuating circumstances.
So to determine your current position, the best place to start is to check the contract you have with your agent (the ‘Terms of Business’), because it should clearly outline the details of the initial fixed term, and other relevant details in regards to the termination the contract.
Second step: find a suitable replacement
Before severing ties with your current agent, find a suitable replacement first. Not just because it’s important to ensure that you have all your ducks in a row for efficiency, but also because most letting agents will work with your current letting agent to manage the transfer, which will make the process a whole lot easier for you.
Letting agents want your business, especially if you already have a tenant in place, so they will often do all the legwork to make the migration happen. That said, it’s worth taking your current Terms of Business to your new prospective letting agent, so they can help you work through all the legalities. Often, letting agents will have their own legal experts who can find legal loopholes to deliver a quick exist from your current agents.
Oh, on that note, you may want to hop over to my guide on finding a good letting agent to help you on your journey.
How to change letting agents
I’m going to refer to both case scenarios below in general terms, so the reality of your situation may differ depending on the contract you have in place with your agent.
1) Changing agents during the tenant-find period
If you’re only using a letting agent to source tenants – and not for a fully manged service – you won’t be signed into an exclusivity deal, so it’s easy to jump on, between and inside several agents.
Unlike when selling a property with an estate agent, letting agents typically charge on a no let/no fee basis, so landlords are able to use multiple agents to find tenants without incurring penalties or being tied into exclusivity agreements.
Basically, you shouldn’t have any problems at all.
2) Changing management agents during a tenancy
This scenario is a bit more tricky, although it can still be relatively less painful than most landlords anticipate. Mostly.
If you’re in this situation, reading carefully through the Terms of Business (your contract with the letting agent) is key. As discussed earlier, all the details of ‘how’ and ‘when’ to officially terminate the service agreement should be clearly in there.
Any reputable and decent agent will discuss the matter with you in detail, and if they can’t change your mind, they should make the process easy enough.
A couple of other points to remember/consider:
The tenancy agreement is usually a contract between landlord and tenant, so it is nothing to do with the landlords agreement with the agent. Many landlords mistakenly confuse the purpose of the two separate agreements.
The terms of the tenancy agreement will not change even if you change agents!
Talk to your tenant
Your tenant may have a relationship with your current agents, so it’s important to talk to your tenant and explain to them that you’re getting rid, and explain why.
Some agents will try to keep you locked in!
It’s not uncommon for letting agents to try and hold onto their customers for dear life, and that can often result in unscrupulous tactics being deployed i.e. the agent will make up junk reasons in an attempt to scare you into submission.
So before believing every word they say, I recommend actually fact-checking their claims.
In similar vain as the point above, letting agents are notorious for plaguing their terms of business with unlawful and unfair clauses in attempt to retain custom.
If any clause sounds ridiculously restrictive and unfair, then it might not actually be legally enforceable.
Reason for termination
If you’ve had a particularly negative experience with your agent (i.e. they’ve fallen short of providing the service they promised), then they’re the one’s in breach of contract and you should have every right to end the contract.
Naturally, getting your agent to admit fault and take responsibility may not be entirely straightforward!
Some agents will try to keep the tenant
Again, depending on the contract, your agent may have a clause which stipulates that you can’t terminate the contract and keep the tenant (which they found). Alternatively, they may require an termination fee.
From my experience this will pan out in one of two ways:
- If you have been a customer of the agent’s for long enough they will just allow you to terminate the agreement and keep the tenant, on the premise that they’ve made enough out of the deal already.
- You have to pay the termination fee!
- Make an official complaint
If you feel your agent is being unfair, you can make an official complaint against your agent.
Even if you quietly utter the words “official complaint” they may just surrender to your wishes just to avoid the hassle.
If the tenancy deposit is secured by your current agent, then you will need to get it transferred to either your new agent, or yourself.
Remember, your new agent should be there to help!
If you’re migrating your custom to another agent, they should assist with the transfer. In fact, if they don’t provide useful assistance I’d question why you’re actually transferring to them in the first place, because they’re evidently not very useful.
Update: Letting agent switch service & advice
After publishing this blog post, Howsy.com (an online letting agent, that offers complete management service for landlords from £45 per month) got in touch [I’m going to paraphrase]: “Hey, love your blog post on sacking/changing letting agents. You’re beautiful. We offer a ‘Switch’ service that might be ideal for you to share. We can even give your readers’ an exclusive deal!”
Ordinarily I pay no minds to the marketing crap I receive in my inbox, because I get inundated by them on a daily basis, and they’re mostly greasy assholes promoting garbage.
Now, I don’t know if it was fate, or if something was in the water that day, but I had a look through the details of the offer, and it actually seems not too bad at all, so here it is:
If you’re currently using letting services by an agent that you wish to cut your ties with, you can switch to Howsy at any time. They will work with your current letting agent to manage every aspect of the transfer; from agreements to deposits to liaising with the renters – and it won’t cost you a penny! And, if you’re unsure about your contractual obligations with your current agent, you can contact their helpline. More details below:
|Letting Agent||Contract||Notes / Includes||Price|
Month by month
|Notes / Includes|
Agent switch solution for Fully Management Service!
Pricing & Discount explained
*£65 for properties in London.
*Sign up to get 2 months FREE property management when you pay the first year upfront - just mention you came from Property Investment Project.
£45pm*Inc VATPrice shown is before discount!
|Visit Website*First 2 Months FREE using link above!|
Please note, I try my best to keep the information up-to-date, but you should read the T&C’s from the agents’ website for the most up-to-date information.
Besides from the fact Howsy take care of all the logistics and management of “switching” agents, I was pretty encouraged by their rates. Knowing how much regular high-street agents charge, I’d be very surprised if landlords wouldn’t stand to make a massive saving by switching to Howsy. Anyways, I thought I’d share in case it might be a useful service/alternative for you.
//End of update.
So, what’s your story/situation? If anyone has any experience or expertise in the area, and has anything else to add, please feel free pick up the mic (via the comment form below)…