Taking over management from your agent
There are many reasons why a landlord may no longer require the services of their letting agent to manage their properties. It may be that the cost of employing an agent has become too expensive, or dissatisfaction with the service provided, or even that your circumstances have changed giving you more time to self-manage.
Most of the time, a tenancy will tick over without any issues but there are some things you will need to consider before deciding to take over the management including:
- Do you know your legal duties as a landlord when it comes to issues regarding accessing the property, deposit protection, fire safety etc.
- If a repair needs carrying out, are you aware of your landlord’s responsibilities?
- Do you have a reliable contractor to carry out maintenance work for you?
- Do you have a warranty for the appliances you provide or cover for emergencies?
- If the property has a licence, are you aware of your legal duties as the landlord/HMO Manager
Whatever the reason, taking back the management of your property from a letting agent should be a straightforward process if you follow the steps below.
1. Firstly, check the agent’s terms of business for guidance on how to terminate the business agreement. Landlords are usually required to serve notice to their agent, so you must provide the adequate notice period as stated in the business contract. Be aware you may be liable to pay a termination fee to the agent, so ensure you read the business clauses carefully, and seek legal advice if necessary before proceeding.
2. Once notice has been served, you need to let your tenant/s know the change in circumstances. Send a letter informing them of the date you will start managing the property from, and include a copy of your own privacy notice to comply with GDPR.
3. The existing tenancy agreement issued by the agent is still be valid once you take back the management, but you will need to check the AST to see the address provided to the tenant/s for them to serve a valid notice to end their liability. If the agent’s address has been used this will need to be updated, therefore you must provide an address in England or Wales to the tenants. You can use the Section 48 notice to document this. Alternatively, you could write a letter confirming this information and include other contact details such as your phone number and email address.
4.The tenant/s will also need to stop paying the rent via the agent, therefore we would recommend instructing them to cancel their existing standing order/direct debit following the final rent payment to the agent. Provide your own bank details and request a new standing order be set up for future rent payments.
5. You should arrange to collect all property keys from the agent, along with any other relevant information they hold relating to the tenancy. For example, the written tenancy agreement, deposit information, all tenant data i.e. application forms, references, credit checks, Right to Rent documentation, check in report and inventory, and invoices for any repairs.
Frequently asked questions
Can I issue my own tenancy agreement or do I have to keep the agent's?
You can issue a new tenancy agreement but you are not required to, the tenancy will continue on the same terms and you may update the contact details via a Section 48 notice.
In general, it will make sense to offer a new one though as it is cleaner and easier option for both you and the tenant. However, before proceeding there are factors which you will need to consider.
Issuing a new agreement will not simply be an extension of the original agreement with the agent, a brand new tenancy will be created. This means you will also need to issue all the relevant start of tenancy documents to tenants prior to it beginning. If you cannot comply with this you may want to consider leaving the tenancy as is until you can.
If the current tenancy is in the periodic stage, you will typically have to offer the tenant/s a new fixed term. If the tenant/s have resided in the property for more than 6 months, you could potentially offer a short tenancy if your mortgage conditions allow it, however your tenants may be reluctant to sign this.
Finally, if there has been any new legislation introduced since the original tenancy was granted, then you must ensure that your property meets the new requirements and provide the relevant documentation. For example, if a tenancy is created on or after 1 June 2020 in England, landlords need to have the electrical installations checked by a competent person. They then need to provide a copy of the electrical installation condition report (EICR) to their tenants. This may also involve performing works on the property to bring it up to a satisfactory standard if the report deems it necessary.
My agent has informed me that under the General Data Protection rules, they cannot give me the tenant’s information. Is this correct?
No. The agent is employed by the landlord and ultimately should not be withholding the tenants information from them.
The agent’s own privacy notice should already provide details of all third parties they can pass the tenant’s information to, therefore if they have not included yourself they must update their privacy notice and send this to the tenants. They can then proceed to provide you with the information.
Do I need to transfer the deposit from the agent to myself?
If your former agent held the deposit on your behalf and you intend to end the agreement, you will need to take over protecting the deposit and serve the scheme's prescribed information on the tenants and anyone who has paid towards the deposit.
The simplest and easiest way to do this is to use the same scheme as the agent. It is common practice for agents to use a 'custodial' scheme where the deposit is held by the scheme itself. If that is the case, you should set up your own account with that deposit protection scheme. The scheme can then be instructed by the agent to transfer the protection from their account to yours.
If the money is currently protected in an insurance-based deposit scheme, the money is held by the agent and will need to be transferred over to you. Here, it is common practice for the agent to ask for evidence you have registered to protect the deposit in a scheme prior to releasing the money to you. When you have protected the amount and provided evidence of this, they will then release the money to you.
Once this has been done, you must send the tenants a copy of the new deposit certificate, prescribed information and scheme rules etc. This insures that the deposit is continuously protected and prevents any potential issues from occurring later on.
Make sure to keep evidence that the agent protected the deposit correctly when they received it, including evidence of the prescribed information. Should you later need to seek possession from your tenant, you will need this as evidence you were always compliant with the deposit regulations.