As my wife will verify, I tend to moan, rant and rave quite often. However, I have to say my ramblings are quite justified when you realise just how many crooks there are in the world of estate agency.
It is no secret that I chose to turn down a well paid career in KPMG Corporate Finance (Mergers and Acquisitions: Insurance Sector to be precise) as I got shafted by my letting agent whilst renting private accommodation as an undergraduate at the University of Warwick. Not once either – I learned first hand why estate agents get such a bad name in two successive years of renting student accommodation. Whilst my first experience can partially be attributed to a rogue landlord of sorts, the second is purely down to unethical business policies of a local estate agent. I am pleased to say I now manage properties formerly controlled by the latter and, as those of you who are are still awake will note, I have therefore taken business off at least one of the estate agents responsible for my poor experiences.
In comparison to running an estate agency on a day to day basis, the initial formation and launch of the company was a walk in the park. Identifying potential clients wasn’t too hard – an online competitor publishes a nice long list free of charge and all of my friends were happy to pass on details of their respective landlords.
Most of the potential clients were unhappy with their current letting agent and thus signing up early landlords was easier than I thought. I signed up a handful of property owners with a portfolio of c. 50 student dwellings and began letting in January 2006. All properties were filled in time for the September 2006 to July 2007 academic year. Easy money you might say.
The general nightmare began in July of 2006, when I realised one of my clients wasn’t quite what he claimed to be.
This particular landlord (and I use the term very lightly) claimed to own various properties which he did not. Not only did he commit fraud against Smarter Housing Ltd., he was also committing fraud against the real property owners by suggesting he was fully managing their properties for 10%. Given SmarterHousing’s introductory management fee was 6%, it doesn’t take a rocket scientist to work out this landlord was scamming 4% from every rightful property owner.
The full details of September – December 2006 would fill a book, so to summarise:
- SmarterHousing was a new company, with no reputation other than the pre-launch hype;
- SmarterHousing were lumbered with a fraudster of a landlord, claiming to own properties which he did not;
- SmarterHousing would have folded had I not secured a personal loan for over £50,000 to furnish and secure properties which were not otherwise fit for occupation, as a direct consqeuence of being attached as counter-defendant in numerous county court claims against my client; and
- SmarterHousing were left significantly out of pocket when the fraudulent Landlord announced he did not own the majority of properties thus refused/could not afford to pay for work carried out on his behalf.
Thankfully, most Landlords are respectable citizens and after the fun and games of identifying the true owners, I was able to recover the bulk of the early expenditure. I didn’t recover all of it and at this point in time I am awaiting a May 2009 court hearing where I hope to recover some £5,000. I’m confident of the ruling, but have no hope of recovering the cash.
I also failed to realise the playground mentality of this particular individual. Whilst it was clear to those who dealt with SmarterHousing on a daily basis that this landlord owed a significant amount of money, those who had never heard of the company were in for a rather fictional account of events. At the time still a client, with 3 properties versus the 30 he claimed to own, this individual took the liberty of slating SmarterHousing to every Tom, Dick and Harry he met over the coming 24 months. The best he could muster was that SmarterHousing owed him £x thousand (with x = 1 to 100!) although if you tell someone a lie enough times they may start to believe it.
Some rival estate agents love this kind of news and in recent weeks I have learned many are actually promoting this chap’s version of events. I’ve heard that the company is going bankrupt // can’t afford an office // is losing all its clients // etc, from students coming into our premises having been in other estate agencies on their way to us. As such, I could embark on a mass PR campaign if/when I win in court although pot kettle and black spring to mind. Instead, I shall take pleasure in showing the rogue landlord and those who have thrived off his tales that SmarterHousing is here to stay.