Gold Key Lettings feels it has a responsibility as a letting agency to help its landlords avoid risk where possible, through a deep understanding of legislation, in-depth referencing processes, and a strong rent protection policy included in its managed proposition.
“Rent arrears across our current portfolio of 220 properties is at less than 1% because we're vigilant in selecting quality tenants,” says Russ Blockley, Managing Director at Gold Key Lettings. “Once we're conducting a viewing for the applicant, we know that 80% of the vetting has been performed on that applicant during our pre-viewing protocol, for example.”
Strong pre-qualification and referencing of applicants is just one area where this Sheffield-based lettings agency helps its landlords to mitigate the risk involved in renting out their properties, especially in the current circumstances. Another is compliance.
Caring for compliance
“It's a very minimal percentage of properties that you get issues with, as long as you’re doing your due diligence prior to the tenant being accepted,” says Russ. “That's one reason why landlords need an agent - to take care of compliance, which is ever increasing. Of the 175 or so pieces of legislation currently out there, it is the main seven or eight which are usually enough to make them realise that they need to go through an agent.”
The fines for non-compliance are high for landlords, and this is where the agent can step in, to ensure all the relevant points are covered and audit trails are set up.
“If you were to miss a signature on a document, you've not given the relevant documents or you can't prove that you've given them that document, this could have serious consequences if you have any issue on the property or you need to get repossession.”
Protecting landlords’ - and agents' - incomes
Rent Protection and Legal Expenses Insurance is becoming ever more important to help landlords reduce the risk of a loss of income - while ensuring they can continue to pay their agents.
The evictions process alone can be long and expensive. “It costs approximately £1,600 minimum to evict a tenant through the courts. Plus, if you've got a tenant not paying rent for six or seven months, the landlord could be £5000 down on rent as well,” says Russ.
“We’ve got a 90% take up at the moment on rent protection insurance. Certain cash rich landlords are prepared to take the risk if their tenants fall into arrears, but not many," he says. "It's easier now to share real life examples of landlords who haven't had rent guarantee insurance and the tenant has fallen into rent arrears.”
Even if you have a rent protection provider, you need to ensure you can take confidence in them, so your landlords can trust you in turn. "We based our proposition to landlords on a rent guarantee option which was suddenly cancelled during lockdown with 14 days notice," says Russ. "Goodlord was the only company that I could find that would transfer those policies over."
For agents who are prepared to go the extra mile with helping their landlords through the claims process, especially if they can benefit from extra support from their insurance provider, this can also help with attracting new landlords.
“I've had landlords come to me because their existing agents wouldn't get involved in the repossession, even on a fully managed property. One such landlord is now bringing five properties over to us. It's all about being flexible to help somebody out - and you can see the rewards.”
