Has your letting agent gone Breaking Bad?

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25 Jun 2018

Will your letting agent go Breaking Bad?

Author: Richard O'Neill

Letting agents are facing increasing pressure to put more and more time and resource into remaining compliant. In the face of this financial pressure, there is a growing trend of cash-strapped agents using tenants’ deposits as a pay day loan to 

tide them over – although many do not repay the illegally borrowed funds!

A BBC investigation found that in 2016, letting agents helped themselves to more than £1m from tenants’ deposit schemes - leaving landlords without protection for their investment. The problem appears to be growing with The Property Reporter finding in the first few months of 2018, £750,000 has already been stolen by crooked letting agents.

“Whilst watching an episode of Breaking Bad, it suddenly occurred to me, like Walter White, other agents hadn’t started out with bad intentions, they are victims of circumstance” explains Romans’ Lettings Managing Director, Richard O’Neill.

“All agents (hopefully) start out with good intentions, they want to do the right thing for landlords and tenants alike. However, just like Walter White, when faced with financial pressures and unforeseen circumstances, many begin to look for short cuts.

“One bad decision after another, Walt’s life spiralled out of control and he became the villainous Heisenberg. It’s much the same for the letting agents who at first may just take a small short cut but, as their financial outlook gets bleaker, the decisions they make become more and more drastic.”

With the looming tenant fee ban, agents stand to lose a sizable chunk of their income and so the pressure on smaller, independent agents will grow and, if the recent behaviour of misusing client money is anything to go by, the amount stolen will increase further putting more and more landlords at risk.

“It is by no means all doom and gloom for the lettings industry, there are many compliant, honest agents who will go above and beyond to do the right thing by the customer. Some agents have employed a dedicated compliance team to manage the on-going changes to legislation and ensure client funds are protected” adds Richard.

The Government have recently announced plans to bring in a number of changes each designed to better protect tenants and prevent rogue landlords and agents giving the industry a bad name including; creating a nationally recognised qualification for lettings agents and a database of rogue landlords and letting agents.

If you are concerned that your letting agent could go Breaking Bad, get in touch with Romans today on 01344 985 870 and one of our ARLA qualified experts will be happy to advise you. 

 

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