Finally; we now have the confirmed date (1st June) for the implementation of the tenant fee ban; it’s ‘really happening’.
And so, for many, this this where the real work begins especially for letting agents who now have to think about how they will manage the impact on their businesses and mitigate the loss of fees.
Some may be looking to enhance their services, bring online new initiatives to make the management of the property portfolio more cost effective whilst others are looking at covering those losses by speaking with suppliers to potentially reduce service costs.
Options may include taking the reporting process in-house, however this could actually be a backwards move as such steps may result in:
- increased staff costs (full time wages even when there is a natural slump in reporting numbers)
- inability to scale up during busy periods
- having to cover sick, maternity and holiday pay
- managing the booking of appointments and property visits
- increased costs of provision and support of software (if not outsourced)
- having to cover costs such as mileage, vehicle provision and insurance
- provision of mobile phones / tablets / tools
- provision of ongoing training to remain up to date with changes in legislative requirements
- lack of impartiality and perceived bias
So what is the alternative?
Outsourcing is easier and faster than ever before with the use of apps, mobile phones, Wifi hotspots allowing letting agents to book directly with inventory providers and that enables you, the clerk, to manage your workload whilst ‘out and about on the road’ providing agents and landlords with a flexible, cost efficient resource.
Technology in the payments industry has also advanced enough to be able to provide a seamless transactional experience for all those involved in property visits and work orders and as we know; suppliers often operate at low margins in order to remain competitive so the simpler the experience the better the cost projections are for all parties.
Benefits of outsourcing for managing agents and landlords include:
- no staff costs
- ability to scale up and down during busy and slow periods
- sick, maternity and holiday pay are all covered by the supplier
- provision and support of software is factored into the suppliers costs
- mileage and mobile phones / tablets covered by the supplier
- ease of booking appointments and property visits
- ease of sharing of reports with tenants and landlords
- tenants able to sign reports on-line including adding their comments and uploading of pictures
- auditable trail to evidence sharing and receipt of reports with all parties concerned in the letting process (agents, tenants, landlords, guarantors, deposits schemes)
- professional and impartial reporting
- claims against a deposit more likely to be successful
It is very clear that there is a real opportunity here and now to offer a professional service that bridges the gap between the tenant, landlord and agent by enabling them to use your service in the most cost efficient and effective way.
As various options are considered in the lead up to the ban, one of the most important issues to be mindful of is that landlords will be looking to agents for both advice and guidance in how best to protect their investments and it can be difficult to remain impartial whilst trying to look after the best interests of all parties so there is a very real risk of bias creep even if a conscious effort is made to remain entirely focused on the issues and evidence at hand.
The Government deposit schemes (TDS, Mydeposit, DPS) guidance on what they require in terms of evidence to support a successful claim is very much centered around what is considered ‘the best evidence’ which has been prepared by a third party such as a professional inventory clerk, contains date photos and has been signed by the tenant.
So a ‘do it yourself’ approach to property reporting is not considered helpful and guidance states that reports ‘compiled by agents or landlords (rather than an independent third party) will require supporting evidence that the tenant has seen the inventory and had an opportunity to agree the contents or comment on it’.
For an agent this can a be a tricky situation to manage when dealing with both the landlord and tenant whereas as an inventory provider; your impartiality is one of the drivers of your service, it should always be the main consideration in all your reports and should be the leading factor when promoting the benefits of using your reporting services.
So what should you be doing now?
Pricing and service level agreements should be reviewed; meet the client and find out what they are planning come the 1st June. Will it be ‘business as usual” or will they be looking to support their bottom line by making changes to the inventory provision?
Plan, Plan, Plan
- if your agents are looking at their options; what solutions can you offer / provide?
- can you enhance what you already offer to your agents in regards to quality of reporting?
- how can / will you mitigate the impact of the fee ban on your business and customers?
Some options could include the review of your staffing complement; are you making the most of your resources and could hiring self employed clerks be more cost effective than salaried staff, will flexibility be your key driver or known costs projections in regards to staff wages and outgoings?
Revisit your own supplier list; are you getting value for money and more importantly can you speed up and enhance your service by using InventoryBase ‘fit for purpose’ and scalable booking and reporting system so that the managing agent does not need to even consider the option of in-house reporting in the first place?
Put yourself in the agents / landlords shoes
What matters most to you when deciding on which service to use? Is it cost, quality, delivery of service, flexibility, potential to scale up for larger agents?
Look at and consider alternative ways of collaborative working with other service providers in your area to cover shortfalls, increase coverage etc.
All important questions / options to consider that will help you shape your service and deliver to the level both wanted and required.
Offer more choice
Where possible; look to add to your current work streams with:
- Legionella Risk Assessments
- Gas Safety Certificates (must be GAS Safe Registered)
- Fitness for Human Habitation Risk Assessments
- Interim property visits (under utilised by agents and landlords)
- Property viewings for letting and sales process
- VOID property visits
- Snagging for new builds
- Smoke/carbon monoxide detectors reports
- Maintenance reporting
- Property surveys; home condition reports and valuations (must be RICS qualified)
- Photography and floorplans
- Property MOT (currently under discussion and initiated by The Lettings Industry Council (TLC)
Make the opportunity
As we move forward and beyond June 1st; it is highly likely that we will see an increase in disputes and with the rise of the insurance backed ‘ no deposit’ options with inventory providers expected to deliver more robust, detailed reports than ever before and we will start to see a need to attend court as landlords will only be able to make successful claims against the deposit with irrefutable evidence supplied by professional reporting services.
The impending tenant fee ban is a real opportunity to showcase all that you have to offer as a professional reporting service and business so make and take the opportunity to stand out from the crowd.
To find out more about how InventoryBase reporting software can help you become the ‘go to supplier’ book a personal demonstration or start a free trial at https://inventorybase.co.uk/signup
Sián is a consultant and author for InventryBase Academy; part of InventoryBase providing the lettings industry with robust, comprehensive and professional report training and software