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Client Conflict of Interest

  • Some landlords are also Letting Agents- LANLA's. These  Property professionals own one house or a personal portfolio of homes, whilst  simultaneously letting others on behalf of their client landlords. This might  give rise to a conflict of interest.For example: imagine that all but two houses have been let. The student viewing season is almost over. The first of the two homes is owned by the LANLA; whilst the second is owned by his client. A group of  students, having viewed both, cannot decide, since they are equally suitable.  Now they seek guidance on which to choose? Does the LANLA flip  a coin or ask the prospective tenants to choose? Is he able to resist the  temptation to prioritise his own interests? The following might avoid any such  conflict and establish integrity.
    • Any ethical dilemma is quickly resolved by ensuring the personal portfolio always takes second place. Such policy must be decided upon prior to the  predicament. Human nature is self-seeking until harnessed by a highly developed  conscience.
    • The question "yours or mine?" i.e. which one should be marketed first; ought  never to arise.
    • If the LANLA works hard and markets accommodation properly  he will normally let the remaining personal house in due course, whilst  retaining his integrity meantime.
    • Ultimately this is not merely the most ethical, but also the most  commercially advantageous approach.
    • The LANLA will receive commission as agent for the client, in  addition to the rent from his personal portfolio. Win: Win!
    • Showing preference risks not merely losing any commission (in the event the  house is slow-moving and the client defects), but moreover the LANLA   's reputation.
    • Always favour clients in the event of any such conflict.
    • The advantage of using a LANLA with such dual experience  is likely to be reflected in the additional service provided.
    • Some letting agents do not share the same insights of a landlord.
    • Similarly, most clients do not share the extensive knowledge of an  agent.
    • With a foot in both camps the LANLA will likely enjoy a more  balanced understanding, sharing more empathy with the needs and personal  concerns of a fellow landlord.
    • In such scenario it may be a simple matter to allow tenants to choose for  themselves, being careful not to influence either way.
    • If tenants have no preference then it is best to rent the client's house  first!
    • The above situation involves an ethical choice of properties by the LANLA . There are times when the dilemma is not the property but the  tenants.
    • Almost 20 years ago, a similar situation arose. In this scenario two tenants  were keen to secure either of two houses; neither had a preference. Perfect -  what possible conflict could exist? Two tenants and two houses where is the  dilemma?
    • Both houses were aimed at professional tenants. Both tenants were  professionals. One tenant was a recent graduate; the other was an aging  builder.
    • Again, the first house was owned by the client whilst the second was owned  by the LANLA.
    • Statistically, the recent graduate was then less likely to be as reliable a  tenant as the gruff looking builder.
    • The client's first impression was a prejudicial impressionism!
    • The builder's physical appearance resulted in the client ignoring the  statistics favouring the more presentable graduate.
    • Having provided the client with the tenants and statistics, the client was  immediately persuaded, in his own mind, that the erudite graduate was the better  bet, despite evidence to the contrary.
    • The client was allowed to select: "It is entirely your choice; if the client  selects the builder on the left; then the LANLA will accept the  graduate on the right, for his own property" and vice-versa.
    • The builder went on to reside in the LANLA's house for years;  whilst the graduate's stay at the client house was short-lived and problematical.
    • The former was a model tenant who was never in arrears, whilst the same could not be said for the graduate. Never rely merely on a pair of eyes - always analyse the facts. Always act with integrity even if this means losing an opportunity, at least you will not lose sleep!
Published: 5 November 2013 Last Updated: 17 November 2021