A case that The Property Ombudsman (TPO) was asked to review came from a landlord concerning repairs, rent and deposit.

Issue A: Monies paid for repairs and maintenance

The landlord said that he paid £2,300 to the agent for remedial works and improvements to the property, including the repair of the broken banister.

He requested copies of invoices and photographs to show the work undertaken. However, when he gained possession of the property a year and a half later, he discovered that the work had not been completed.

The landlord therefore wanted the return of monies paid.

The 2019 edition of the TPO Code of Practice for Residential Letting Agents was considered with a particular focus on Paragraph 14b. The agent was required to respond promptly and appropriately to reasonable communications from the landlord, particularly where it related to safety regulations. Furthermore, under Paragraph 14d of the Code, they were also required to keep suitable records of repairs and maintenance carried out.

The agent was therefore expected to have kept copies of invoices on file and provided them to the landlord upon his request. No written evidence in this regard was provided by the agent.

The lack of work led the then tenant to contact the local council regarding the condition of the property. The landlord was made aware that an inspection was to take place to determine whether there were any hazards that needed to be addressed. The tenant vacated the property shortly after this and it was at this point that it became apparent to the landlord that the repairs and maintenance had not been completed.

The Ombudsman was not satisfied that the agent conducted the repairs and maintenance requested by the landlord and therefore supported the complaint.

Issue B – Rent

The landlord stated that the agent arranged two tenancies, both of which fell into rental arrears, and neither were addressed appropriately.

Under Paragraph 13a of the Code, the agent was required to use legally acceptable methods to obtain prompt rental payments from the tenants. They were also required, under Paragraph 13b of the Code to have procedures to notify the landlord and the tenants of rent that had become appreciably overdue. Finally, under Paragraph 13d of the Code, they should have drawn the landlord’s attention to a build-up of serious rental arrears and sought appropriate instructions.

From evidence provided, the landlord only received a statement of account for rental payments at the beginning of both tenancies. Thereafter, it was apparent that the tenants fell into arrears.

There was no evidence to suggest that the agent had appropriate procedures in place to communicate with the tenant and landlord in such circumstances. Had the landlord’s attention been drawn to the serious build up of arrears, he could have made an informed decision as to whether to continue with or to end the tenancy, given the tenant’s breach of the Tenancy Agreement.

TPO cannot make an award for rental arrears owed by tenants. However, the Ombudsman was not satisfied that the agent met their obligations to deal with the arrears appropriately and considered they caused undue aggravation, distress and inconvenience which merited an award of compensation.

Issue C – Deposit

The landlord said that a deposit of £650 was taken by the agent for each of the two tenancies, but it was kept and not passed back to him as part reparation for the rental arrears.

A deposit should have been taken as security to the landlord for any damages to the property and/or any unpaid rent for the period of the tenancies. At the end of a tenancy, an agent should communicate with the landlord, to establish whether they wish to make any deductions to the deposit, which must then be communicated to the tenant.

There was no evidence to indicate that the agent communicated with the landlord at the end of either tenancy to ask whether he wished to make any deductions to the tenants’ deposits. Given that both tenancies ended with at least three months’ rent arrears, it was reasonable to conclude that the landlord would have intended to withhold the full amount to compensate for some of the arrears. Likewise, the tenants should have been contacted to advise of the intended deductions.

The landlord said that the first tenant’s deposit was retained and that he was informed the monies would be used to carry out repairs and maintenance of the property. However, he confirmed that he did not authorise this and also claimed that there was no evidence of the monies being used for this purpose, given the condition of the property after the second tenancy.

Due to a lack of communication from the agent, the Ombudsman believed that the landlord was deprived of the opportunity to obtain the deposit to use towards rent arrears and therefore supported the complaint.

Outcome

All complaints were supported and merited an award of compensation.

An award of £4,000 was made to reflect the £2,300 paid to the agent for repairs, the deposits of the two tenants who vacated the property with rental arrears (£650 for each tenancy) and an additional £400 for aggravation, distress and inconvenience caused.

* This Case Study was featured in Property Professional Magazine in 2022