By Ben Reeve Lewis
Some time last year I was interviewed by Guardian Journalist Sirin Kale, who wrote an excellent piece on cannabis farms and dodgy lettings agents, published a couple of weeks back.
Having been in more than one cannabis farm in my career and spending my days dealing with criminal activity in the PRS, I read the experiences of the poor property owners with a professional eye and more than a little interest.
Mr Hajaj, whose property was turned into a cannabis farm, told Sirin that “A sharp-suited British Asian man named Shan Miah arrived in a sports car. He was in his late 20s or early 30s, charming and confident. He boasted of his business interests in Dubai. “He was doing very well for himself,”
And he certainly was doing very well for himself, just not in the way poor Mr Hajaj thought. A sharp suit and a fancy car are a poor basis for making a business decision. Yet one that, sadly, is all too familiar.
Why don’t landlords do proper checks?
When you take out a mortgage, the lending company do extensive checks and demand high levels of proof of income and stability. Yet so often, people place the most expensive thing they own under the control of someone else, without doing similar checks as a mortgage lender.
I often wonder if, in some cases, it’s a sort of British thing. To do with embarrassment and not wanting to cause offence. After all, Shan Miah, the young man in the sharp suit and fancy car (who the article explained was also known as Sean or Roberto) who wrecked Mr Hajaj’s property, was working hard to convey his trustworthiness. It would have been rude to push too much, wouldn’t it? Almost like calling him a liar.
Letting agents should prove their competency and trustworthiness
Property owners should be insisting upon extraordinarily high levels of proof of competency and trustworthiness. Professional agents should not only welcome the chance to prove their professionalism and integrity. But also invite rigorous questioning. Whilst I appreciate that young agents learning the business won’t know everything about the legalities the company they represent should be able to answer questions and provide supporting documents.
For a long time, government played with the idea of creating a single standard of competency for letting agents, where qualifications were needed. At one point by all agents and at another point by senior staff in management. But that hasn’t happened.
Reliability?
The industry itself has stepped up. Propertymark is a reliable badge created by an industry concerned about the Shan Miah’s of the world tarring them all with the same brush.
Are major high street names more reliable? Probably yes, but even they aren’t immune. I have on numerous occasions, encountered dodgy operators working within generally honest firms. Including agents running their own internal agency without their employer’s knowledge.
Should I avoid small local independents? I have come across loads of great Indy’s who are more connected with their landlords and tenants than brand names and provide a far more favourable service. However, there are just so many of them these days. And unfortunately, these smaller operations are where the crooks tend to operate. So, a high level of due diligence is needed.
Are they a member of a Redress Scheme?
There are 2 mandatory redress schemes for agents to be members of,
- The Property Redress Scheme and
- The Property Ombudsman
And agents can be fined for not being members. The only problem there is that anyone can join, even Shan Miah. There is no competency bar.
Those failing in standards are expelled, but it doesn’t stop them from operating before they get caught out. Also, many crooked operators I encounter say they are in a redress scheme, but when you check, they aren’t.
What checks should you carry out?
Tessa asked me to share the checks that my own outfit, Safer Renting, conducts when we are investigating criminal activities and the kinds of things we discover. Hopefully as an object lesson for property owners considering using some form of management agent.
Guaranteed rent
What’s not to like for the property owner not wanting the responsibility of hands-on management? You know the old saying, “If it looks too good to be true, it probably is”.
I’m not saying that all guaranteed rent business models are scams…..just that a hell of a lot of them are.
There are big companies who run such models very well, Northwoods and Orchard Shipman spring to mind, but they are large companies with huge cash reserves. They genuinely can guarantee rent if the tenant doesn’t pay.
There may even be insurance products for companies to meet their promise. The question is, “Do they have the necessary reserves to meet the guarantee?” Is that start-up shop in the high street, doing sterling work touting for business and sending the message they are ‘Doing well for themselves’, actually capable of doing what they claim?
Back to Mr Hajaj mentioned above. The article on the agent says, “But in November 2022, the rent didn’t arrive as usual. Imperial said it would evict the tenants,”. Well, what happened to the guaranteed rent there then?
That’s the ever present problem I encounter. When the guarantee is actually needed, it often isn’t there.
Checking online
Companies House and other similar websites that provide the same information are a vital place to check.
- Look for the ‘Filing history’, which will tell you the turnover of the company, so you can gauge their financial reliability.
- Check the SIC code to see if their registered activity matches their business and they arent registered as a car showroom masquerading as a lettings agent.
- Check the names of the company officers and run their names through not just Google but other internet browsers as well. Google doesn’t have a monopoly. I find Duck Duck Go quite good at
providing information that I didn’t find elsewhere. - Be cautious where a person does not seem to appear anywhere at all. Conversely, many organised criminals deliberately avoid social media or anything where their name might appear, which can give pause for thought.
- Companies House and similar will list other companies a person is connected to, look at these too and run checks on them as well. Tedious, I know but remember it’s your property you are handing
over and a couple of hours playing Sherlock Holmes can save a lot of expensive misery down the line. - Look for games of musical chairs being played by company officers. I regularly see that the most dodgy of operators are constantly changing directors and secretaries every few months. If on companies house you see the list of appointments swapping around like a premier league squad fighting off relegation, it is prudent to ask yourself why.
- Look for anything listed “First Gazette”, “Strike off”, and “Application to strike off the register”. These are often signs of financial instability and impending bankruptcy, even if it was at some point
threatened but later called off. Be worried about wobbles. - Companies House will also tell you if the company has dissolved. It’s not unusual to find a dissolved company still trading and still using their logos and emails.
Local knowledge
Join the NRLA – This piece of advice may make Ben Beadle fall off his chair, we don’t always see eye to eye but I do think the NRLA do a brilliant job. And I happen to notice that the criminals tend not
to be members. The NRLA hosts regular local events at which you can meet other local landlords and swap gossip and info about local outfits to avoid.
The NRLA are not the only landlord’s association, though. There are many smaller local landlord associations, for example, the North West Landlords Association, and the Eastern Landlords Association. Both have local meetings for their members. There is probably a local association near you – a search on the internet will find it.
And finally
To hammer home my original point, don’t, in your eagerness, fall for the charms of the keen, earnest young man in the too-tight Norman Wisdom suit. Do rigorous checks on him and his company.
Make suspicion your default position. He may look like “He is doing well for himself”, but he may also just turn out to actually be Norman Wisdom.
