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How to avoid rogue or fake letting agents

tenant upset because a letting agent has scammed her

Did you know almost anyone can set up shop as a letting agent? Unlike solicitors, accountants, and chartered surveyors, agents don’t need qualifications or previous experience. To make matters worse, it’s very easy for someone to set up as a fake letting agent. All they need is a website, access to images of properties, and a telephone number.

Rental scams are a growing problem. According to Action Fraud, the National Fraud and Cyber Crime Reporting Centre, there were 5,751 reports of rental scams in 2022, a 23% increase on 2021.

In this blog post, I explain the three key laws that letting agents must comply with, and share red flags to watch out for, to help you spot rogue or fake letting agents. Finally, I describe what tenants and landlords can do if they’re unhappy with letting agents.

In writing this post, I draw on my experience as a lawyer, and my dealings with letting agents as a landlord.

>> Related Post: How to resolve problems with letting agents

>> Good Landlording podcast: Guide to selecting good letting agents

Why landlords and tenants need to be careful when choosing letting agents

letting agent introducing a landlord and a tenant

It can be really hard to tell if a letting agent is any good. They might have the right patter, a smart-looking website and appear competent, but just about anyone can set up as a letting agent.  

All someone needs to do to become a letting agent is register with a redress and client money protection scheme, and not be bankrupt or banned by the Competition and Markets Authority. They don’t even need a licence.

However, although the Regulation of Property Agents working group report, published in 2019, recommended the regulation of letting agents and estate agents, the government has not acted on the recommendations.

This means that landlords need to be very careful when choosing a letting agent. Likewise, tenants need to think twice before handing any money over to agents, particularly if paying rent in advance.

Which laws must letting agents comply with?

Before signing up with a letting agent, landlords and tenants should check the agent complies with three key legal requirements. If they don’t comply with one or more of these requirements, walk away (and report them to Trading Standards).

Here are the three legal requirements that letting agents must comply with:

1. Letting agents must be a member of a redress scheme

In 2014, the government enacted The Redress Schemes for Lettings Agency Work and Property Management Work Order 2014 (the Redress Schemes Order). Its aim was to “help weed out the cowboys that give agents a bad name, and drive up standards with the least regulatory burden”.

The Redress Schemes Order makes it compulsory for letting agents and property managers to belong to a redress scheme. The agent has a legal obligation to display the name of their redress scheme in their offices and publish it on their website.

An easy way to see if an agent belongs to a redress scheme is to enter the agent’s name or postcode in the free Trading Standards Property Agent Checker.

2. Letting agents must join a Client Money Protection Scheme

The Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019, or the CMP Regulations 2029 for short, require all letting agents and property managers who hold client money to join a “client money protection scheme”.

Agents must display the certificate in any offices open to the public and on their websites. They must also provide a copy of the certificate to anyone who asks, free of charge.

Agents who don’t join a client money protection scheme may be fined by up to £30,000. Also, agents can be fined up to £5,000 if they don’t provide a copy of the certificate to anyone who asks, or don’t display their certificate in their offices or website.

Unlike the redress schemes, there isn’t a central place where you can check which client money protection scheme a letting agent belongs to. Instead, you need to check the websites of each scheme.

Here are the links to search the list of members of each Client Money Protection Scheme scheme:

3. Letting agents must publish fees on website and in office

Section 83 Consumer Rights Act 2015 requires letting agents to publish their fees on their website and display them in their offices.

The list of fees needs to be sufficiently detailed so that a landlord or tenant can “understand the service or cost”, inclusive of tax. If the fee “cannot reasonably be determined in advanced”, the list must describe how the agent will calculate the fee.

The local authority can fine a letting agent up to £5,000 for failing to publish the fees appropriately.

What are fake letting agents and rental scams?

rental scam written with house keys

A fake letting agent is someone who pretends they’re authorised to let properties on behalf of landlords, when they’re either not letting agents or they’re not authorised by the owner of the property. They take deposits and ask for upfront payments of rent, only to disappear with the money. This is called a rental scam.

Rental scammers often target foreign students who might not have a UK guarantor, which gives the agent an excuse to ask for a bank transfer of six months’ rent to secure the accommodation. International students are also less likely to know what is usual in the UK.

Often the fake agents scrape genuine listings off other agents’ websites. Sometimes they even show the property to the victims, but it turns out to be an Airbnb.

Red flags to help to spot a fake letting agent and rental scams

line of red flags against overcast sky

Unfortunately, there are rogue and fake letting agents who prey on the vulnerable, including foreign students, people with a poor credit history, and inexperienced landlords.

Here are practical tips to look out for red flags that suggest a letting agent is incompetent, rogue (criminal) or even fake:

1. Does the letting agent’s website have the right information?

The website might look pretty, but take a long look at it. Just as you can often spot an email scam because it doesn’t look quite right, it’s the same with websites.

It’s a good idea to play detective before parting with upfront payments. Here’s a checklist of things to look out for on the agent’s website that might signal they’re scammers or rogue letting agents.

1. Incomplete or absence of accreditations

If the website doesn’t have the following accreditations, it’s a sign they’re either fake or sloppy letting agents. In either case, walk away.

  • Redress scheme. It is a legal requirement for letting agents to register with either The Property Ombudsman or the Property Redress Scheme.
  • Client money protection scheme. The agent must register with a client money scheme such as Client Money Protect or UKALA, and show their logo on their website.
  • Deposit scheme. The website should display the logo of the agent’s chosen deposit scheme, i.e. MyDeposits, Deposit Protection Service, or the Tenancy Deposit Scheme.

2. Does the website show company information?

Does the website have the name of the company in the footer? You can spot a company name as it will have “limited”, “ltd” or “plc” after it. A limited liability partnership will have the initials LLP after the name.

There isn’t a standard way for letting agents to provide company information on a website. However, a legitimate letting agency will include the company name, number, registered office, and VAT number somewhere on the website. It’s best practice to include these details in the footer.

Here are two examples of what legitimate letting agencies include in the footers of their website:

Example 1: XXX is a trading name of YYY Lettings Limited, Registered Office [address]. Registered in England under Number [number]. [Company Name] Limited is a member of and covered by the ARLA Propertymark Client Money Protection Scheme. Registered Office: [address]. VAT number [number].

Example 2: XXXX Limited is registered in England & Wales No. [number]. Registered office: [address].

Some legitimate letting agencies choose only to display their trading name in the website footer, and place the full company information in their Privacy Policy or Terms of Business.

The important thing is that you should be able to find the standard company information easily from the home page.

Once you find the company name and number, it’s simple to research the company and the directors on the Companies House website. You might even find that the company is fake, and isn’t registered with Companies House.

3. What does the “About Us” section say?

Most legitimate letting agencies will have an “About Us” or a “Meet the Team” section on the website which has the names, profiles and photos of their key staff.

It’s possible to check these names against LinkedIn or Facebook, to see if they tally. Sometimes scammers use fake names and identities. It’s a good sign that the agent is legitimate if the people have worked there for a long time.

If there’s no “About Us” section, or any information on the individuals running the agency, it’s a red flag. Most legitimate letting agents are only too happy to give their credentials and they have links to their social media accounts in the footer of their website.

4. No information about fees on website

Letting agents are legally required to publish their full fees on their websites. If the fees are missing, the agent is breaking the law, and may also be fraudulent.

In either case, don’t deal with letting agents who don’t publish their fees on their websites. They’re either incompetent (as they’re breaking the law), or criminal. Either way, it’s not worth taking the risk.

5. Only a mobile phone number and/or personal email address

Legitimate letting agents will have a corporate email address and a landline. If the details on the website show a Gmail email address or a mobile number as the sole contact details, it’s unprofessional and is another red flag.

6. No terms of business

Reputable letting agents publish their terms of business on their websites. Take a look, and see if the details accord with the details elsewhere on the website.

If there are no terms of business, privacy policy, or cookies policy, it may be the website of a fake or criminal agent.

7. Listings that look too perfect / generic / too good to be true

Scammers often scrape listings from other websites to look legitimate. Alternatively, they might use generic interior shots that don’t fit with the building. It’s worth checking the address on Rightmove Sold Prices to see if the photos on the agent’s website are in keeping with previous listings.

Also, do check Google Street view to see if it tallies with the photos in the agent’s listing.

If the price for the rent for that property looks too good to be true, it may well be a scam. As rental demand is high, there will be a reason why a rent is lower than the market. Sometimes that reason will be fraud.

2. Does the office location seem right?

Some fake or rogue letting agents claim to be based in prestigious locations. You can check Google maps to see if there are signs of the agency. Google the address to see what other businesses claim to be based there.

Look at the street view and think whether it feels right that a letting agency with the type of listings they have on their website would be based in that location.

3. What do their reviews say?

There are lots of ways that reviews can be left for letting agents. Check to see what people say about the agency. For instance Google, and Marks Out Of Tenancy where you can look up both the address and the letting agent.

4. Does the letting agent list properties on property portals?

I would be very suspicious about a letting agent who doesn’t advertise on Rightmove, Zoopla and On The Market, as these are the market leading portals for lettings. Advertising on the portals also shows they’ve gone through some sort of basic tests to become a member.

For instance, a letting agent needs to provide the following in order to join Rightmove:

  • Proof of identity
  • Proof of professional indemnity insurance with a minimum £100,000 insurance
  • Redress scheme registration number
  • Membership number from the Information Commissioner’s Office
  • Client Money Protection registration number.

Whilst advertising on the portals isn’t necessarily a badge of quality, it’s a sign that the agents may be legitimate.

5. Check the Companies House record

Companies House is an excellent source of free information about companies and individuals. You can check whether the company exists, whether it’s up to date with the filing of its accounts, who the directors are.

If the company has a history of late filings, overdue accounts, it’s a sign that the company is not well run.

You can also check the names of individual directors to see where else they’ve been a director. This can be very useful as you can see whether the directors have a history of being directors of insolvent companies.

What does it mean if a “company” is not on the Companies House register? It means either it’s a fake company, or alternatively, it’s a business which hasn’t been incorporated as a company, i.e. an unincorporated sole trader or business. For instance, the agent may operates as a sole trader. However, as it’s so unusual for a letting agency not to be a company, I would see it as a red flag. If a website puts a “Ltd” after the name of a business that isn’t actually a company, it’s another red flag.

>> Pro tip: Search the Companies House Register for free here

6. Google the agency and the individuals

Google is an excellent tool to check what’s listed about the agency and the individuals. If there is no trace of them, that’s a red flag.

Likewise, there may be comments in forums that complain about the agency, or evidence that the individuals have scammed people before.

How can tenants protect themselves before paying rent upfront?

woman looking at a letting agent's website for a property in london
Don’t be tempted to pay upfront without doing your due diligence

Here are some due diligence tips for tenants to protect themselves before paying rent upfront to a letting agent:

  • Do try and attend a viewing at the property yourself in person, or ask a friend to go for you. If you can’t do this in person, ask to do a WhatsApp viewing, starting from the street view, going inside and into the property in real time (not recorded).
  • A legitimate agent may ask you to pay a holding deposit of up to one week’s rent to secure the property, while references are taken and the tenancy agreement is prepared. If the holding deposit is more than one week’s rent, this is another red flag, as that is the legal maximum.
  • Ask to see copies of the EPC, Gas Safety Certificate and Electrical Installation Condition Report. A legitimate agent will not be fazed by this as it’s a legal requirement to give these documents to tenants before they move in.
  • The agent will need to send you an assured shorthold tenancy for signing. This should clearly state the name and address of the landlord, the duration of the fixed term, and the rent.
  • The agent cannot ask for a deposit of more than 5 weeks’ rent, so if they ask for more than this, it’s a red flag as it’s illegal.
  • Ask the agent which scheme they use to protect deposits. Again, this is a standard question, as it’s a legal requirement for landlords to register deposits with a deposit scheme, so the agent should not be fazed. It must be one of three schemes: MyDeposits, Deposit Protection Service (DPS) and Tenancy Deposit Scheme (TDS).

Finally, it’s best to pay the deposit and first month’s rent by credit card or a bank transfer, rather than by a money transfer service like Western Union. With a bank transfer, you will have the details of their bank account, and can report it to the police if the letting agents suddenly disappear without giving you the keys.

>> Related Post: What tenants need to know about renting

Where’s the exit?

Fire exit signs in block of flats

One of the biggest headaches for landlords whose letting agents provide a poor management service, or even if the landlord wants to take over management, is trying to terminate the contract.

Although it’s legally dubious, many big name letting agents have provisions in their standard terms and conditions that require landlords to pay a penalty (eg two months’ rent + VAT) to terminate a full management agreement, even if it’s after the first fixed term tenancy.

This is sharp practice and responsible letting agents should enable landlords to terminate after the initial fixed term tenancy for any reason. These clauses are likely in any event to be unenforceable penalties and unfair contract terms.

My advice to letting agents is that they should treat landlords fairly and reasonably if they want to terminate the management agreement. Tying in landlords with punitive break clauses give letting agents a bad name. These clauses alos make sure that the departing landlord will never speak highly of the agent again.

My advice to landlords is to avoid all the aggravation of having to argue the clause is unenforceable, by negotiating the exit terms right at the beginning, when everyone is friends. A notice period of three months or payment of three months’ fees would seem to be a reasonable amount, once the first fixed term tenancy period has ended.

How can landlords and tenants complain about letting agents?

complaints written on window

Here are the different ways that landlords and tenants can make complaints about their letting agents:

1. Follow the letting agent’s complaints procedure

Letting agents should have a formal complaints procedure, although it’s actually not compulsory for members of the Property Redress Scheme. On the other hand, members of The Property Ombudsman scheme must have a formal complaints procedure.

Ask the agents to provide a copy of the procedure and follow it to make your complaint. If they don’t have a complaints procedure, write to the manager of the branch.

Here is some useful information on how to complain published by The Property Ombudsman.

2. Escalate to the redress scheme

There are two different redress schemes in England, and the rules differ slightly between them. If you’re unsure which scheme your letting agent belongs to, you can check on the Trading Standards Checker.

Agent is a member of the Property Redress Scheme

Members of the Property Redress Scheme have 8 weeks to investigate the complaint and respond. If the person complaining is unsatisfied with the response, or doesn’t receive a response within 8 weeks, they can escalate it to the Property Redress Scheme.

Here is a guide on how to complain to the Property Redress Scheme.

Agent is a member of The Property Ombudsman

Members of The Property Ombudsman also have 8 weeks to investigate the complaint and respond with their final viewpoint letter.

3. Appeal to Propertymark if letting agent is a member

It’s highly unlikely that a fake letting agent will be a member of Propertymark, because of the steps agents need to go through to be accepted by Propertymark. However, it’s possible that an incompetent or rogue agent could a member of Propertymark.

If you’re unhappy with the outcome of the complaint to the redress scheme, and the agent is a member of Propertymark, you may escalate the complaint to the Propertymark. They can look into many issues including misuse of client money, the failure to uphold high standards of ethical and professional practice, and acts of dishonesty.

Here’s a link to Propertymark’s guidance on consumer complaints.

4. Complain to local Trading Standards

If the letting agent isn’t a member of a redress scheme, and you’re a victim of dishonest behaviour, you can report them to your local Trading Standards department.

Local authority Trading Standards and Environmental Health and Housing departments have wide powers to investigate complaints and fine letting agents.

You can also get help from Citizens Advice.

5. Report to Action Fraud (Police)

If you’re the victim of fraud, report it to the Action Fraud part of the police.

6. Leave a review for your letting agent on Marks Out Of Tenancy

Finally, share your experience with the letting agency on the website Marks Out Of Tenancy, to help others avoid what you’ve gone through.

>> Related Post: How to resolve problems with letting agents

>> Related Post: What tenants need to know about renting

how to avoid being scammed by fake letting agents

1 thought on “How to avoid rogue or fake letting agents”

  1. I invested in an apartment complex recently, and I was thinking of hiring a property letting agent to assist me with the rent collection from now on. It was a good tip when you advised us to make sure the letting agent has a website we can check that states their accreditations for us to evaluate if they can be trusted. I’ll be sure to keep this in mind while I look for a property letting agent working in Brentwood to hire for my apartment complex soon.

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