Friday, November 10, 2006

Computer says "no"

Perhaps the biggest drawback of being an absentee slumlord is the need to deal with the morons who work as estate agents in the UK. Since we are now on the wrong side of the world, we appointed a local firm to manage the rental of our small apartment when we left. We've considered selling up, but then we'd have to deal with the accumulated junk in the loft - with any luck some tenants will steal it, saving us the bother of disposing of it.

When we bought it, our house was by far the cheapest property in the town, which is pretty much why we chose it. Perhaps this is related to it being situated opposite an undertaker's, but actually they are greatly under-rated as neighbours - all their visitors are very quiet and well-behaved (deathly silent, one might almost say). There are literally no houses for sale now at less than twice the price we paid, and the rent we charge is about 2/3 of the bottom of the "normal" market in the area.

We've had no problem finding tenants. The most recent set have been there for about 18 months and by all accounts are looking after the place properly.

We have, however, had problems with the idiot agents. The most recent saga dates back several months when there was a small bit of damage, which was just about worth claiming for via the buildings insurance. The insurance was by now arranged though the agents (our own previous policy would not handle rentals or empty periods), so we (or rather jules, who actually handles all of this stuff) asked them for the relevant policy details and forms to fill. The agents basically told us it was our responsibility to sort it out, and they could not provide any details (such as a policy number). It didn't even seem clear what company was providing the insurance. Clearly nothing was going to be forthcoming, and after a few attempts we basically gave up (it wasn't much money).

More recently, our tenants briefly got behind on their rent. They had contacted both us and the agents about it, and we all accepted that they would be able to catch up in a reasonable time (the debt never actually exceeded the deposit we already held). Then suddenly, completely out of the blue, a letter arrived in jules's email (pdf that had been posted from the agent to the tenants) giving them a week to pay up in full or the landlord (US!) would commence eviction proceedings!

Some frantic phone calls to the agents ensued (having recently told the tenants that they were ok, we were not keen to be painted as the Landlords from Hell and of course with no sitting tenant we would get no rent...) and we were told that their hands were tied, it was all down to "the insurance". You see, as well as the standard buildling insurance, we have insurance to cover legal costs associated with evictions and non-payment of rent. If the arrears exceed a modest threshold (which they did by a few days, under a payment scheme we had all already agreed) then "the insurance" kicks in and takes action to stop the debt building up. There was nothing we could do other than cancel the insurance.

Somehow jules managed to convince them that the arrears were not actually increasing in a real sense and persuaded them to stop the threats without actually cancelling the insurance. She even reverse-engineered what "the threshold" was and arranged a payment scheme that would not trigger the action again. At this point, we also installed skype to save on phone bills. However, we saw a window of opportunity to raise the issue of the property damage again. Surely the agents could hardly claim ignorance of the insurance, since it was the insurance that had just triggered the latest crisis.

Well, they did their usual trick of stonewalling and not replying to emails. Eventually, somehow, jules got a reply out of them:

Oh, we don't arrange your house buildings insurance at all - that is your responsibility.

Flabbergasted, we looked back through all the monthly statements, and noticed that the amount of money taken for insurance had gone down at the time our most recent tenants moved in. Sure enough, it seemed that we were paying for the legal stuff, but not the buildings insurance. This was certainly not something we had asked the agents to drop, but we'd now been uninsured for 18 months! So we asked them to put it back on. They had to send out forms again, with all the usual boxes to tick - have you had any previous claims, is the property unoccupied, do you have DSS tenants (ie those reciept of welfare payments)...

Oh, we DO have DSS tenants - the ones who moved in 18 months ago, the point at which the insurance cover vanished (in fact their rent arrears had been due to some bureaucratic cock-up over benefits).

Oh well, we thought, maybe that will put the premium up a bit, but tenants on benefits are hardly unique. The forms got sent back....and nothing happened. Oh, we'll try again. Another set of forms...the same boxes to tick....and somehow no insurance. jules got on the phone with the agent, who said she would do it all on-line..."Oh, there seems to be a problem. I'll get back to you".

A couple of days later; "Sorry, we can't do DSS. Computer says no".

After a brief moment of panic - what do we do with an uninsurable house with sitting tenants - jules googled and in about 30 seconds had found a string of companies who will happily provide insurance, for about what we were paying anyway.

So, just to re-cap: the agents had firstly introduced DSS tenants without considering the possibility that this could be an issue with the insurance, then simply allowed the insurance to lapse without even noticing, let alone telling us, then even after having had it pointed out to them that the insurance vanished when our new tenants moved in, and on being faced with a form with that specific box to tick, still did not realise that DSS tenants could be a problem, and finally had no ability to find insurance where such tenants are involved, even though it is easily available. And for this, we pay them.

The average salary of an estate agent is roughly 50% higher than that of a scientist in the UK.


EliRabett said...

You might consider entering into a lease to purchase arrangement with your tenents. You can sweeten the pot by making the agent's fee part of the lease go to credit for the purchase.

James Annan said...

Oh, we think we'd better keep it in the hope that it will suffice as a deposit if we ever return and have to buy a real house. Prices in the UK seem to be rising higher than our savings, let alone our salaries.

Anonymous said...

well you probably don't want to see who they are, but since I'm an anonymous coward I'll just say it sounds a lot like my bad experiences with "Finders Keepers"; although the rot probably runs through the entire horrible estate agent industry. never have so many paid so much for so little.