How to Address a Breach of Contract by Your Letting Agent
As a landlord, building a strong relationship with your letting agent is essential, as you depend on them to manage your property matters effectively. Therefore, nothing is more frustrating than receiving poor service from your letting agent.
In 2024, the Property Ombudsman noted a 27% rise in the number of complaints against letting/estate agents, primarily attributed to inadequate communication, poor record-keeping, mishandling of complaints, and ineffective marketing and advertising. While these problems can be very frustrating, it is often difficult to differentiate between substandard service and an actual breach of contract by the letting agent.
What Constitutes a Breach of Contract by a Letting Agent?
An agent who responds slowly to emails or fails to rent out your property within the expected timeframe might be providing poor service; however, this does not automatically constitute a breach of contract. The main reference point will be the terms outlined in the written agreement itself, which details all aspects of the commercial relationship. You should carefully review your contract with the agent, focusing on the services they were supposed to deliver, and identify the specific terms that have allegedly been breached.
Potential Breaches of Contract
Below are several possible signs that your letting agent may have broken their contractual obligations:
- Not properly marketing the property as specified in the contract.
- Imposing excessive or undisclosed fees not outlined in the terms of business.
Legally, an agent must disclose all fees they plan to charge
- Failing to register the deposit as agreed
- Not inspecting the property to an appropriate standard
- Omitting a break clause in the tenancy agreement
- Neglecting to check the inventory thoroughly
To successfully bring a breach of contract claim, you will need to prove the existence of a valid contract, show that the agent breached it, and demonstrate the damages resulting from this.
Professional Negligence
Aside from breaching a contract, professional negligence can also occur when a professional fails to perform their duties to the required standard, resulting in harm or loss to the client. For letting agents, this means they have not met their obligations to you as their client, and that this has resulted in financial loss or damage to your property.
To establish professional negligence, you must demonstrate that the agent owed you a duty of care, that they violated that duty and that the breach resulted in harm and loss to you. Navigating this process can be quite complicated, so it is a good idea to consult with our expert professional negligence lawyers to determine whether you have a legitimate case.
Letting agents have a duty of care to their clients, meaning that they are obliged to act in their best interests and deliver professional services. This includes:
- Providing accurate and truthful information regarding the property and its value
- Carrying out comprehensive background investigations on prospective tenants.
- Ensuring that all necessary legal documentation is properly prepared
- Keeping their clients updated on any developments or changes
The duty of care is considered breached when an agent’s actions do not meet the expected standard, such as providing inaccurate property valuations, failing to disclose critical information, or misrepresenting facts.
Examples of Estate Agent Negligence
The following actions may constitute a breach of the letting agent’s duty of care towards the client:
- Misrepresentation: Providing false information regarding the property or its condition, which may result in a lower letting price or other financial detriments
- Incorrect Valuation: Offering a valuation that is significantly lower or higher than the actual market value of the property, causing financial harm to the client
- Breach of Confidentiality: Disclosing confidential information about the client or property without obtaining their consent
- Inadequate Property Management: This may include neglecting maintenance issues or failing to promptly address tenant complaints.
- Insufficient Tenant Checks: Neglecting to conduct thorough checks on tenants, which could lead to potential issues for the landlord.
A crucial aspect of both negligence and breach of contract claims is demonstrating financial loss that directly arises from the agent’s actions. Examples of financial loss include lost rent, property damage or legal expenses.
Reporting an Estate or Letting Agent
To report a letting agent for professional negligence or breach of contract, start by submitting a formal complaint to the agent directly, ideally in writing, and specify your concerns and particular issues. Most reputable agents have a complaints procedure in place, so it is wise to check their website or request details. Keep a record of all communication and any evidence supporting your claim, along with any interactions with the agent.
If the agent fails to respond satisfactorily within eight weeks or if the issue remains unresolved, you may escalate the issue to their designated redress scheme.
Using a Redress Scheme
Estate and letting agents are legally required to be members of a government-approved redress scheme, such as the Property Ombudsman or the Property Redress Scheme. These schemes offer a complementary and impartial service for the resolution of disputes between property agents and their clients. The aim is to achieve a comprehensive and conclusive resolution of conflicts by employing methods such as mediation or formal adjudication to settle the matter.
Redress schemes will only entertain complaints after you have fully utilised the complaints procedure of the agent; however, once this step has been completed, you can file a complaint with the relevant body, supplying details of your grievance and the agent’s response.
If the complaints body determines that the letting agent did not act properly, it can instruct the agent to make corrections and, in some cases, provide you with compensation. This approach is often faster than court proceedings. However, while the Property Ombudsman has the authority to award up to £25,000, such large payouts are uncommon. Typically, most compensation awards are under £1000.
Propertymark serves as another professional body within the property industry. It can also receive complaints about letting agents affiliated with this group and will investigate if sufficient evidence is presented. However, you should only pursue this route after you have already tried to contact the agent directly and have lodged a complaint to the Property Ombudsman or through some other redress scheme.
Legal Remedies
If all previous attempts to resolve the dispute are unsuccessful, or if you are pursuing a substantial damages payout, you may wish to contemplate legal action against the letting agent who has failed you.
There are several remedies available to address the losses you have incurred. These remedies are designed to provide redress for the harm inflicted by the agent’s breach of contract or negligence, including:
- Financial Compensation: This allows for the reimbursement of any financial losses experienced, which includes monetary damages or damages to property.
- Specific Performance: In certain situations, claimants may pursue specific performance as a remedy, compelling the agent to fulfil their contractual obligations properly. This solution may be sought when compensation by itself is inadequate to address the damage experienced.
- Rescission of Contract: Claimants are entitled to request the rescission of the contract with the agent if the agent’s negligence or breach of contract renders the contract voidable. Rescission seeks to cancel the contract and return the parties to their initial states, as if the contract had never taken place.
- Injunctive Relief: In situations where monetary compensation may not fully remedy the harm caused by the agent, claimants may claim injunctive relief. This remedy aims to prevent the letting agent from continuing their actions or engaging in behaviour that could further jeopardise the claimant’s interests.
- Rectification: This remedy could be suitable where the agent’s negligence has resulted in mistakes or oversights in the services delivered. Rectification aims to correct these mistakes and ensure that the claimant receives the services they were rightfully owed.
Initiating court proceedings does not necessarily imply that your case will proceed to trial. The court will ask you to first pursue a friendly resolution, which could involve discussions, a mediation meeting or another type of alternative dispute resolution.
Obtaining Legal Advice
Cases involving breach of contract and professional negligence against letting agents can be complicated and difficult to prove, making it essential to seek professional advice from experienced lawyers before moving forward with a claim.
At every step of the process, having a solicitor who specialises in breach of contract and professional negligence claims by your side can significantly impact your case. At Witan Solicitors, we provide professional and practical advice, assisting you through any disputes with your letting agent and helping you achieve a favourable resolution.
Encountering a legal dispute can be an overwhelming experience for anyone. Our client-focused approach guarantees that we take the time to listen to you, understand your situation and explain your legal options, ensuring that you remain in control of your case.
Here are some of the reasons to reach out to us for the best possible outcome:
- Highly Experienced Solicitors: Our adept litigators have many years’ experience resolving complex and high-value disputes.
- Quick Resolution: We aim for the quickest possible resolution through mediation and Alternative Dispute Resolution. If court is the only avenue, we will devise a thorough strategy to secure the most favourable result.
- Excellent Client Care: While we are a results-driven law firm, we take pride in providing our clients with the highest standards of service.
- Flexible Funding: We offer various flexible payment options, such as fixed fees and ‘no win no fee’ arrangements, tailored to meet our clients’ needs.
Things to Consider When Hiring a Letting Agent
Several potential issues can be avoided before you finalise your choice of agent. Take time to research potential agents, including seeking out positive reviews and testimonials on Trustpilot, or consult other landlords who have experience with properties similar to yours.
When engaging a letting agent, it is essential to understand the contract terms, especially regarding fees and the length of the contract. Ensure you carefully review all contracts and documents before signing, and do not hesitate to ask the agent to clarify any points that are unclear. Discuss their marketing approach and determine who will be your primary point of contact throughout the process.
Finally, ensure that the agent is part of a Client Money Protection Scheme, which is designed to safeguard landlords and tenants in case a letting or property management agent misuses or misappropriates their money, as well as being a member of a redress scheme, such as the Property Ombudsman.
How We Can Help
Our professional negligence team has extensive experience in effectively resolving disputes for landlords, and we will work closely with you to reach a quick and effective resolution. For more guidance and advice regarding a breach of contract or professional negligence by your letting agent, please reach out to our team on 0300 303 2071 or email us.
