Why the Broker Won’t Work with “Relocation Agencies”

It is common for Insurance carriers to use a third party, sometimes referred to as a “Relocation Agency”, to assist Policyholders when there has been damage or complete destruction to their residence. It’s important to understand that the individuals that work for Relocation Agencies are not actually licensed Real Estate Agents.

The Broker will not facilitate a Lease involving a third party, usually referred to as a Relocation Agency, because it is the Broker’s understanding that to do so he would be violating his fiduciary responsibility to his Client, the Landlord.

In the Broker’s experience, most, if not all, Relocation Agencies are not registered with the Secretary of State of Alabama to do business. It is the Broker’s understanding that any contract with an out of state business, that is not registered to do business with the Secretary of State, would be void.

In the Broker’s experience, most, if not all, Relocation Agencies present a Payment Letter requiring only the signature of the Landlord. Since the Insurance carrier or Relocation Agency don’t sign the document, the Landlord may reasonably have concerns regarding its enforceability.

In the Broker’s experience, most, if not all, Relocation Agencies require that they, not the Broker, hold the Tenant’s Security Deposit. In this situation, the Broker has no effective way to charge the Tenant if damage were to occur.

In the Broker’s experience, most, if not all, Relocation Agencies refuse to give any financial information to the Broker reasonably assuring their financial capacity to pay rent. The Broker has a duty to the Landlord to obtain documentation reasonably assuring the Landlord that rent payments can and will be made. The Broker and the Landlord have no affirmative duty to “believe” that payments can and will be made just because the Relocation Agent is representing or allegedly representing an Insurance carrier.

In summary, if a Relocation Agency were to agree to follow the process that the Broker requires to facilitate a “Corporate Lease” agreement, then the Broker would consider facilitating the agreement (assuming the Landlord is agreeable to a short term Lease). To date, no Relocation Agency has ever offered to appropriately process a Lease, neither has any Insurance carrier offered to do so.

The above is not set forth as legal advice. The Broker is not an Attorney and if you are reading this and have questions or concerns about your rights as an Insurance Policyholder, you should consult with an Attorney.

3/29/2021