mismanagement by letting agents

[parse]

I have been renting out a property through a letting agent for just over 2 years, as it is the first time I have ventured into this business for the first year I subscribed to their guaranteed rent scheme, opting out once I felt confident enough that my tennants were reliable.

As my tennants appeared to be reliable I felt that I was paying the agents simply to collect my rent for which they were taking a nice fee, I spoke to the tennants and explained my feelings and the agent agreed and advised me that he could see no reason to have problems and offered to draw up a contract for another handsome fee which I declined. So I submitted a written notice to withdraw my property from their management when our agreement ended on May 31st.

On Friday May 3rd shortly after tendering my notice I received a letter from the agent informing me tat as my tennants had not paid their rent for May I would not be receiving payment in the usuall manner until payment was made to them I was obviously concerned and contacted the agent to enquire what was their policy in this situation.

After several phone conversations with the agent getting different reports each time it became clear that the tennants were in fact 3 months in arrears due to one reason or another, I asked why I wasn't made aware of this and the agent said an internal decision had been made to continue to pay me and to allow the tennants to pay arrears " a little at a time ". I argued that I would not have withdrawn from their service if I had known this and that I was being placed in a situation where I was taking on tennants with rent arrears. The agent has since informed my tennant that they are keeping their deposit to cover arrears and that they should arrange a loan to pay May's rent which is still owed and that they should negotiate terms with me which would enable them to build up a deposit gradually when I take over managing the let.

I believe that the agent thought I was still contributing to their guaranteed rent scheme which is why they continued to pay me, and only realised I was not when I informed them of my intention to quit.

I feel they have acted totally unprofessionally and that any agreement they have with my tennants to repay arrears is between the two parties as I was never aware of the situation. Are they legally entitled to retain the deposit ?

Any advice would be more than welcome.

Any comments or advice would be more than welcome

[Trenners]

So .... to summarise .... the letting agent has paid you the rent - even though your tenants are in rent arrears and you have not paid the agent for the service that guarantees the rent and had you known the tenants were in rent arrears you would not have terminated the contract (that you hadn't paid for) with the agent.

Now you are complaining about the agent...... and how poorly you have been treated...... does your greed have no boundaries ?

The issue of rent arrears (as you haven't paid for the guarantee service) lies between you and the tenant. I hope the agent demands the overpayment of rent back from you (ie the money they have paid from THEIR own funds on behalf of your dodgy tenant) ... and sue you in Court if you do not repay it to them ........

You should be grateful for the service that your agent has delivered ...... not complaining on this forum.

For future reference .... TENANT has only 2 "N"s - not 3 "N"s - a useful piece of information if you are planning to be a long term landlord.

Mark

[parse]

So .... to summarise .... the letting agent has paid you the rent - even though your tenants are in rent arrears and you have not paid the agent for the service that guarantees the rent and had you known the tenants were in rent arrears you would not have terminated the contract (that you hadn't paid for) with the agent.

Now you are complaining about the agent...... and how poorly you have been treated...... does your greed have no boundaries ?

The issue of rent arrears (as you haven't paid for the guarantee service) lies between you and the tenant. I hope the agent demands the overpayment of rent back from you (ie the money they have paid from THEIR own funds on behalf of your dodgy tenant) ... and sue you in Court if you do not repay it to them ........

You should be grateful for the service that your agent has delivered ...... not complaining on this forum.

For future reference .... TENANT has only 2 "N"s - not 3 "N"s - a useful piece of information if you are planning to be a long term landlord.

Mark

Thanks for the spelling tip, interesting opinion. My actual complaint is that the agent allowed the tenant to go into arrears without my knowledge and I was only made aware once I tendered my notice to quit my agreement with them, I beleive they thought that I was still contributing to the protction scheme which is why they continued to pay me and only realised I wasn't when they checked my file on receipt of my written notice to quit.

Do you still feel that the the issue of arrears lies between me and the tenant, if so how ?

My main concern, being totally new to this field is that now, I have taken on tennants who have arrears still to pay, no deposit to put down and may possibly struggle to find this months rent due to the fact that they have been asked to pay up more than they were expecting in such a short time, as their agreement with the agency was to pay " a little at a time".

Had I been aware of the situation I would have asked the agent to continue managing until the issue was resolved and would possibly not considered taking on the management my self. Surely you must agree the agent had a duty to inform me of any difficulty the tenants were having in paying.

[Simon Dewsberry]

I think the letting agent should have made you aware of the situation and was clearly at fault as they were not aware of their own internal situation ....i think they are out of order by trying to get you to pay for their mistake ...

Intention to quit, presumably, had a notice period during which time you should have been informed of the situation ...

As you were being paid rent, then, short of being physic how could you possibly be aware of situation ...

Agent is just trying to shork yet more responsibilty after a run of mismanagement

Mark gonna have to disagree with you on this one !!!!!!!!!!!!

The Rodent

I can feel a long thread comming on !!!

J4L ...where are you ?

Gloves out ready !

[GPEL]

I'm sitting on the fence but leaning towards Trenners viewpoint. Your agent should perhaps have advised you of the problem but they were however actively managing the problem. As far as your position is concerned you are no worse off, I would however ask the agent to manage their way out of this problem for you and return the house to you with vacant possession. When you pay a management fee, the service should be viewed in similar terms as an insurance policy (which you may never need to call on), an on call home care policy for rectification of faults, rent collection service and on call for tenant and tenancy issues - not a pay-on-occurence service.

[Simon Dewsberry]

Why was the LA paying out, if funds were "not covered" .......

If they were doing the job properly they wouldn't have paid out, this alone would have alerted OP to situation ????

The Rodent

[GPEL]

Internal matter, owner should only be concerned about effect on them and anything adverse being put right.

[Simon Dewsberry]

As a LL if i receive my rent i feel it is fair to assume "all is well" ???

Certainly a claim on these paid out monies is not acceptable ?

The Rodent

[parse]

Internal matter, owner should only be concerned about effect on them and anything adverse being put right.

I would be very happy for the agent to to correct the matter by continuing to manage but this is not an option I have been offered. Are they legally entitled to retain the tennants deposit ? I'm guessing yes because they are also owed money from the tennant having paid me, all be it due to there error.

[GPEL]

Reasonable to assume all is well but not necessarily reasonable to damn the agent and expect a great deal of compensation because of an oversight or error of judgement, which any human is capable of making. Maybe they made no mistake and were trying to do right but circumstances caused this to backfire. Afterall, the tenancy ran for 2 years without any adverse problems for the ll. The test of the company is their willingness and ability to put things right, which is a good reflection of their customer service levels.

[Simon Dewsberry]

Agreed it is a LA "oversight" , but a very expensive one for OP which is unfair and unacceptable ...if someone borrowed my car for 2 years and looked after it then smashed it up in the last day i would not really think that reasonabe !???

Also agree that LA should put situation right

The Rodent

[GPEL]

Not sure about the analogy nor that it is going to be expensive for the landlord, which is only something that will be known once the dust has settled. If it was me, I'd offer the agent the opportunity to put it right. If they declined, I'd then try and put a monetary value on losses incured through agent errors, if any, so far. However, the agent isn't responsible for the conduct of the tenant and it was the owner who opted out of the Rent Guarantee policy before this all occured. It looks to me that the agent acknowledges actions taken in good faith have backfired and is trying to settle the matter amicably. Any arrangement between tenant & agent made by the agent is underwritten by the landlord whether or not the agent advised the landlord, under the Laws of Agency. If the agent has been negligent it would need to be justified to a judge. In this case s/he may just find in favour of the agent who, albeit naively, took the risk continuing rent payments, was put in this position by the tenant (the actual person not fulfilling their obligations) and is also out of pocket as a result of the tenants late payment.

Put simply, there was a rent problem; the agent took a course of action to resolve the problem and the landlord now wants to manage her own property but wants to set different conditions to resolve the problem that the agent cannot necessarily meet or agrees to. Either the agent is allowed to resolve the problem correctly or the landlord has to accept the circumstances inherited when taking back the property and come up with her own remedy.

[Simon Dewsberry]

"misled" not by lying but "omission of facts"

Methinks

The Rodent

[GPEL]

Sometimes giving too much information causes more problems than it cures.

[pugsy]

I kind of feel for the LL here, after 2 years without issue he thought he was making a smart decision only to uncover a little can of worms. I feel that the agent should have informed him of the arrears, although luckily he still got paid for a while. It doesn't seem right that the LA can take the deposit monies though?? I'd be sweet as pie to the agents, thank them for covering my bottom line and ask them to help rectify and get these guys out. Perhaps get a DC onto it while they're still in the property.

[SPEEDTWIN]

Sometimes giving too much information causes more problems than it cures.

"Sometimes giving too much information causes more problems than it cures."

I think the the L/L was correct in trying to manage the problem but went wrong in allowing the tenant to get as far as 3 months in arrears.

I pay my L/L's on the same day every month if i were to phone every one up every time a tenant was late with the rent or a little bit short the L/L's payments could be all over the place.

I have inherited a number of L/L's and tenants from buisnesses I have taken over and where at the moment all new tenants pay by S/O I still have many who pay cash/chq or we recieve the money from the council (4 weekly) but still pay the L/L pcm.

I think it is the agents role to deal with these problems and not pester the L/L with phone calls every time a tenant pays late or short. But it is down to the agent to use a bit of common sense and manage the problem. I always give my tenants one chance and if they ask if they can pay late but will be in with the cash on a set date that is my choice but I have to deal with it if it goes wrong.

Yes I know the rent should be paid on the agreed date and we all have to pay our morgages on the set date.

[Smarter_Housing]

An interesting situation you find yourself in!

It is easy to see the agent's perspective - that they have provided a service ("guaranteed rent scheme") but for no fee/a fee much lower than anticiapted at the start of the agreement. The fact that the agent doesn't have the rent is irrelevant - the service is no better or no worse; this merely reflects on poor procedure behind the scenes.

However, I do suspect some foul play by concealing the rent arrears. Whether or not this is actually the case would come down to any contracts in place for their services.