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How a lettings agency should deal with complaints from clients

publication date: Feb 7, 2007
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Do you make too much profit in your office/company? I hear you all say “No of course not”, yet I see that an awful lot of members waste money regularly in how they handle - or mishandle - complaints from landlords and tenants.

Have you worked out how much it takes to deal with a complaint? As members will know, ARLA outsources its complaints to The Dispute Service and of course there is a cost to this - as of 1st January 2007 this will rise to £400 for every case.

A projection may be made that this could cost ARLA in excess of £100k per annum. It does not require a genius to work out that this is £50 per office per year of your ARLA subscription. I would suggest that if you have a member of staff earning £20k per annum that any letter sent out costs approximately £15. If it is dealt with at more senior level this escalates to as much as £50.

All very interesting… but where is this going? Well, I have seen a complaint against a member where the owner of the business had written six letters to a tenant complaining about cleaning at a property. The member of staff who had carried out the check out, had indicated at the property that there would be no deductions from the deposit. The letters would have (at £50 per letter) cost his company £300 not including the fact the principal could otherwise have been out bringing in new business. The amount in dispute was £50 - surely much more efficient to have bitten the bullet and paid the account themselves as a gesture of goodwill and perhaps have gained some new tenants. The even worse news could be that if the agent was found to be guilty of a breach of The Code of Practice or the Bye Laws then it could have also resulted in the cost of adjudication being levied as a fine against the member.

Is this likely to happen? Well yes; not necessarily on the first occasion, but almost certainly if a pattern emerged. Do you feel this is harsh? Perhaps you would if it happened to you, but how would you feel as a member with 10 offices paying £500, who never had any complaints? Pretty aggrieved?

It is the duty of the Association to ensure that those who are incurring the costs are the ones paying for those costs. ARLA does appreciate that complaints will arise where the agent has really done everything possible and offered compensation, restitution etc but the complainant wants their moment of glory - these will be reflected in the decision made by the Independent Case Examiner and obviously would not result in any action by the Association. Remember that in the first instance any punishment would be considered by either the Chief Executive or the Compliance Manager, both of whom are experienced practitioners.

So how should complaints be handled in a company before ARLA becomes involved? In the first instance a complaint must have exhausted the member company’s internal complaints procedure. Do you know your company procedure? Over 40% of complainants state that the member of staff with whom they were dealing did not know or would/could not provide the procedure.

There are several possible causes of this:
• The member of staff does not know
• The member of staff is trying to be obstructive
• The member of staff is afraid to admit they have made a mistake
• The member of staff has had no training in customer service
• The member of staff is afraid of senior management

This list is not exhaustive but probably covers most situations. All are preventable. Prevention at this stage usually results in the complainant being much more reasonable and much more easily appeased.

The second most common complaint concerns the length of time taken to provide a response, and this includes the number of times a complainant writes, e-mails and faxes.

A recent response from a member of staff (not at the senior level in a complaints procedure) stated quite simply: “I would apologise for the delay in responding to your letter of August. XYZ will not be paying compensation. Should you wish to pursue this matter you should contact ARLA… etc.”

When was the letter written? NOVEMBER! This should have gone to a senior member of staff. Taking two months to reply is hardly likely to appease a complainant, and the bland statement that the company will not pay compensation is more likely to be antagonistic than conciliatory.

Another example of unsatisfactory service - over a three month period a landlord had written 17 e-mails, faxes and letters and not received a single response until ARLA became involved. Two letters from the agent were all that was required to answer the complainant. Fortunately for the agent, intervention from the TDS was not required, otherwise this could have resulted in a fine equivalent to the cost of adjudication.

One case currently active in Amersham awaits a response from a member - it has been requested 3 times. If you will not or cannot answer your professional body do you even deserve to belong? Possible sanctions in this case cannot be mentioned because the matter is effectively sub-judice as the complaint cannot be dealt with until such time as a response is received.

When this subject was raised at a regional meeting, a member of many years standing suggested that this is because of the influx of new members and that ARLA was allowing standards to drop. Very interestingly one of the examples used on that occasion concerned his own company - and he did not have a clue about it.

Please remember that the membership of ARLA has previously indicated that they would welcome Independent Redress. ARLA is currently developing a system that will be sufficiently robust to deal with this in a manner that will be acceptable in the eye of the public and the consumer bodies who will take a great interest in how it works in practice.

ARLA has long advocated the licensing of agents and feel that the vast majority of our membership back this course of action but how ready for it are you? To come back to the start of this article “Are you making too much money?” because some would certainly be in for a big shock.