Editor's note: This brief was summarised by The Property AI Newsroom from a report by The Negotiator. Read the original article for full details.
Ombudsman Sides with Landlord in Rent-to-Rent Dispute with Letting Agency
The Property Ombudsman has issued a proposed decision against a letting agency after finding that a landlord’s student HMO was transferred into a rent-to-rent arrangement without his knowledge or consent. The case involved Kusal Ariyawansa, who discovered his six-bedroom student property in Liverpool had been handed to a third-party company by Student Haus, part of the Mistoria Group.
According to the report, the agency “incorrectly signed a contract” on the landlord’s behalf and allowed another company to take over management of the property without his prior authority. The Ombudsman found that this change in occupancy type invalidated the landlord’s insurance, potentially leaving him without cover if damage occurred.
The Ombudsman also upheld complaints regarding repairs and pest-control issues, as well as utility charges being applied during void periods. Additionally, it was found that the agency charged a 9% management fee instead of the agreed 8%.
A provisional compensation award of £700 was proposed, including £250 for the rent-to-rent arrangement, £150 for utility charges, and £300 for management failures. The landlord also received a £1,288.13 credit after the agency accepted that some utility deductions had been applied incorrectly.
The proposed decision is a preliminary assessment and is subject to review before a final decision is made. Mistoria Group has stated that it is disputing the proposed decision, noting that the Ombudsman’s assessment was made without their file or representations, which have now been provided. The complaint remains open and under active review.
This case highlights the importance for letting agents and inventory clerks to ensure proper authorisation and transparency in management arrangements, particularly when changes could affect insurance or contractual obligations.
Source: The Negotiator