In this case the Agent arranged a tenancy for two years in favour of four tenants who had offered to pay £200 per month more than the previous tenants. The landlords, Mr and Mrs J, were understandably happy that the Agent had found tenants willing to pay a higher level of rent. However, nine months into the tenancy Mr and Mrs J were contacted by the police to advise that they intended to raid the property as the heat signatures detected from the building indicated that it may be being used for drug cultivation. Furthermore, the police advised Mr and Mrs J that the persons living in the property were not those as recorded in the tenancy agreement and that references may have been forged. Following the raid, which found that the property was being used as a cannabis farm, Mr and Mrs J complained to the Agent stating that they should have been more diligent in their referencing. The Agent responded by arguing that, as per a previously arranged tenancy, they had not used a referencing service provider, adding that the documents provided by the tenants contained no information which should have put them ‘on notice’ that something may have been wrong.
I found that the Agent’s referencing of the tenants should have indeed put them ‘on notice’ as three of the four tenants came from Vietnam, yet no documents had been obtained confirming that they had rights to live and work in the UK; only two of the tenants had provided proof of a current and previous address; none of the tenants had provided a previous landlord reference and none of the tenants had been credit checked. Furthermore, from the information provided, I was not convinced that the Agent had actually met all of the tenants.
As it was clear that the Agent had failed to act in accordance with Paragraphs 7a and 7c of the TPO Code of Practice by providing an appropriate referencing service, I supported the complaint. Accepting that no amount of referencing can guarantee that a tenant will pay the rent, in this case, the Agent had every reason to doubt that the tenants would be suitable for the tenancy. However, the tenants had paid the rent regularly and on time. It was also apparent that Mr and Mrs J were aware of the Agent’s referencing methods through previous tenancies, insofar as referencing service providers were not used. As such, I considered that Mr and Mrs J could have required more questions to be asked of the tenants before agreeing to the tenancy. As there was no financial loss to consider, I made an award of £500 to reflect the avoidable distress, aggravation and inconvenience that the Agent’s poor referencing service had caused the landlords.
In the circumstances where an agent obtains information about a tenant which should clearly put them on notice that the tenant is unlikely to be suitable for the tenancy, I expect that agent to make further enquiries and to inform their landlord client of their findings and provide appropriate advice. To not do so and to proceed with the tenancy is unprofessional and reckless, and may well lead me to make an award which includes loss of rent and/or damages should the matter be referred to my office.