Direct Residential Lettings Limited (DRLL) has been expelled from The Property Ombudsman (TPO) for failure to pay an award following a serious breach of TPO's Code of Practice.
The letting agency is now in liquidation1 having formerly traded from a branch at 20 Western Road, Hove in East Sussex.
DRLL's expulsion follows a complaint from a landlord and its failure to pay an award as directed by the Ombudsman after he independently reviewed the complaint.
TPO is the UK's largest property ombudsman scheme and operates a free and impartial dispute resolution service for consumers. More than 22,000 sales and lettings offices have registered with TPO and follow its Codes of Practice.
Christopher Hamer, the Ombudsman, referred DRLL to TPO's Disciplinary and Standards Committee (DSC) after the agent failed to fulfil the conditions of its membership and pay an award to the landlord complainant.
Case summary and findings
The Ombudsman upheld a complaint made by a landlord regarding an unpaid utility bill after a tenant moved out of the landlord's property, which DRLL was instructed to let and manage.
A third party inventory company provided a check-out report for the property after the tenant had vacated the premises which confirmed the final gas meter reading and money owed.
The Ombudsman found that this was the second time that a tenant had been able to vacate a property and claim their deposit money back without settling the final utility bills. After the first time, the landlord had been assured by DRLL that it had put procedures in place to check that tenants had paid all final bills before it released the deposit.
While it was the tenant's responsibility to pay the final gas bill under the terms of the Tenancy Agreement, the Ombudsman felt there were serious flaws in DRLL's communication with the landlord and the firm's complaints handling process as the evidence presented showed that DRLL appeared to have ignored the landlord complainant's request for assistance for several months, by which time interest had been levied on the overdue gas charges.
While DRLL co-operated with the initial complaint review process, it has failed to pay the award given by the Ombudsman, which constitutes a serious breach of membership and the obligations outlined in TPO's Lettings Code of Practice.
DRLL has made no responses to the correspondence from TPO's Disciplinary and Standards Committee over its failure to pay the award given by the landlord and the firm has made no Representation to the independent Council of TPO that subsequently expelled the firm from TPO membership for a period of two years.
The complainant now has the option to seek payment of the award by alternative means, such as the small claims court and TPO would provide guidance with that course of action as requested.
Gerry Fitzjohn, chief operating officer of TPO, said: 'Direct Residential Lettings Limited was given very clear instructions by the landlord to ensure the utility bills were paid prior to the deposit being returned to tenant. Despite this, the deposit was returned and the agent failed to live up to their own reassurances that they had procedures in place to avoid an occurrence of this type of situation.
'The award was a fair reflection the aggravation, distress and inconvenience experienced by the Complainant. The agent's failure to pay the award has resulted in TPO notifying the Office of Fair Trading and relevant local Trading Standards Service. We have also offered to provide supporting documentation to the complainant should they wish to pursue this matter through the small claims court.'
'Our Codes of Practice outline the high standards we expect of agents to protect the best interests of consumers and this case highlights how TPO will not tolerate anything that falls short of these standards.'
 Source: Companies House (Dec 2013).