Why do we ask our Landlords for ID and Proof of Ownership?

Many new landlords who are working with Smart Lettings question why we ask for so much information from them, including their photographic ID and Proof of Ownership (of the property they are wanting to let).

In our experience, it is not the norm for letting agents in South Wales to ask a landlord to confirm his/her identity and for proof that they are the legal owner of the property they wish to let out. Of course, all landlords expect us to get this information from the incoming tenants; so why would we not ask the same of a landlord? Would it not put the agent’s due diligence into question with referencing tenants if they weren’t to ensure the legal standing of the property before they let it out?

If you were selling or buying a property, it goes without question that the agent and solicitor acting within the transaction will ask for both these documents. It is without doubt that the sale/purchase will not complete without both parties confirming their identity and the seller proving they are legally allowed to sell the property.

As professional letting agents, we have a duty of care and a responsibility to undertake due diligence for the protection of all parties involved. The contracts we are creating are legally binding, so in order for them to be enforceable they must be accurate.

Not having the correct landlord details on a contract can cause many issues. Insurances can be invalidated and even possession orders could be affected if the true details of the landlord are not shown accurately on the tenancy agreement.

Last year the government made it a legal requirement for all letting agents to disclose the details of every landlord they worked with for the tax year 2014-15 to HMRC. Every agent by law must disclose the landlord’s name, correspondence address and the address of the rental property. Obviously this is with the aim of clamping down on landlords who don’t declare rental income for tax. However, should we not actually have the correct legal owner on our system, who do you think HMRC will be chasing? The person whose details we have had to legally give to them, of course. So if the records don’t match, (which they won’t), then this will cause both the landlord and their ‘representative’ quite a headache.

Sometimes husbands/wives/parents take on the responsibility of letting and managing a property on behalf of the family member who is the legal owner. In this instance they can sign agreements and contracts as an Authorised Representative of the owner. It is still essential that the legal owner is identified as the owner and that they put their request for the other person to be their representative in writing for the avoidance of any doubt.

Signing as an authorized representative

When one person gives another permission to sign a legally significant document on their behalf, the signer is essentially acting as an authorized representative for the other person. When someone askes another to sign leases/agreements on their behalf, they are in effect appointing them as their agent for that limited purpose. Under the law, this is called “procuration,” which means by proxy or agent (basically, one acting on behalf of another with the other’s authority).

Signing as a proxy or agent is limited to a specific purpose, like signing your lease. Where a person is appointed to act as another’s agent for all legal purposes (as opposed to the single, limited act that you have been appointed to perform), this is called “power of attorney.” A person with power of attorney for another may sign all legally significant documents on behalf of the other person.

Where one person gives another permission to sign a lease or agreement, it is confined to the single act that has been authorized to perform: signing the lease on behalf of the other person. That is the scope of the authority that has been expressly conferred upon. This means that you cannot sign other documents on their behalf based on their permission to sign just the lease.

Actual permission is required

In order to legally sign for someone else, the signer must have the express permission of the person they are signing for. For example, if someone had not given you explicit permission to sign the lease, but you believed he would have so you signed to help him out, you might be in trouble.

Although it may be clear to you and your representative that explicit oral permission has been given to sign a lease, a landlord/agent  may require that this permission be put in writing. In fact, any cautious landlord/agent  would do so. The last thing a landlord wants is a lease signed by someone who purports to be an agent of the tenant, but in fact is not.

If you are concerned you are not receiving the best advice from your letting agent, please do not hesitate in contacting Smart Lettings on 01656 657033. We offer free, no obligation advice on best practice procedures within the Lettings industry.