Reckless Referencing
Complaint
Mr and Mrs D were the landlords who had instructed the Agent on a tenant find only basis. Following the Agent undertaking this task and installing the tenants in the property, rental payments stopped and Mr and Mrs D found themselves in the position of having to take legal action to regain possession of the property. Mr and Mrs D referred the dispute to my Office following the conclusion of legal action which had removed the tenants from the property but had left them with a substantial shortfall in rent.
Investigation
The Agent had obtained references for the tenants, one of whom was reported as owing substantial sums and had a number of County Court Judgments, and the other was reported as having no employment. The referencing agency recommended that the unemployed applicant only be accepted provided a suitable guarantor was found. The Agent then wrote to Mr and Mrs D stating that the applicants had passed referencing checks and a guarantor had been found. Predictably the tenants soon stopped paying rent. After eviction proceedings and recovering the deposit of £1,500, Mr and Mrs D were faced with a loss of £6,100. Mr and Mrs D also provided evidence that there was no realistic prospect of the outstanding debt ever being paid by the tenants. My investigation also found that the Agent had failed to obtain a guarantor, despite their assurances to the landlords.
Outcome
I concluded that the Agent had not just distorted the facts when reporting on the referencing results but had acted recklessly in moving the tenants into the property without a guarantor. Their later insistence to Mr and Mrs D that there was a guarantor was simply not true and their submission that the tenants were deemed acceptable was misleading. Whilst I normally take the view that no amount of referencing can guarantee that rent is paid, in this case there was never any realistic prospect of the rent being paid and vital information had been deliberately withheld to the extent that the Agent had misinformed Mr and Mrs D. I, therefore, concluded that a quantifiable financial loss could be attributed to the Agent’s shortcomings and awarded £6,275 in total which also included a sum for the avoidable distress aggravation and inconvenience caused by the Agent’s actions.
Learning
It is vital that correct and clear referencing information is provided to landlord clients to enable them to make an informed decision whether to accept prospective tenants, prior to any tenancy being agreed. If there is any doubt whether a tenant is suitable for a tenancy the landlord must be appropriately apprised and his written decision obtained.