tedrogers Posted May 24, 2011 Report Share Posted May 24, 2011 I had a tenant that was sourced by an agent (fully managed), 2 year tenancy agreement, T lived in my flat for 3 months then suddenly started to claim that the flat was uninhabitable and stopped paying rent. T got a lawyer involved and made a spurious and overinflated claim (15k) against me, I counter-claimed for missing rent and deposit (8k). After much legal cost (5k) T's lawyer disappeared, T dropped claim and agreed to release deposit but couldn't pay any additional rent as is broke. Clearly cooked the whole thing up to break the 2 year agreement and didn't really have any money in the first place. T was self-employed with a very tenuous freelance consultancy job. The references provided were very thin and certainly didn't involve anything substantial like a tax return of accountant reference etc. I was not sent these references at the start and unfortunately trusted that the agent had done the relevant checks. Do I have any grounds to take the agent to court for my lost rent and legal costs becuase they did not obtain proper references that would have shown the tenant was totally incapable of paying rent? Thanks in advance for any advice. Link to comment Share on other sites More sharing options...
Richlist Posted May 24, 2011 Report Share Posted May 24, 2011 Your agent works for you and any decisions taken by your agent are your decisions. Its important when employing an agent, to check that what they are doing, meets with your approval. Tenant selection, references, the type& method of administration etc are all things that should be closely checked until, over time, you build up confidence in the agents work. I doubt you will have much success in making a claim. Link to comment Share on other sites More sharing options...
tedrogers Posted May 24, 2011 Author Report Share Posted May 24, 2011 Thanks for the swift reply, yes I had suspected as much. I had hoped for a minimum reference requirement (especially for someone who was self employed) and/or some sort of duty of care from the agent. I did request the references but wasn't sent them until it had all kicked off and by then it was too late, I will write a letter of complaint to the (very large) agency and see if I can get any response. Link to comment Share on other sites More sharing options...
Carryon Regardless Posted May 24, 2011 Report Share Posted May 24, 2011 I use LA's for find only sometimes. I insist I interview any potential T's and for my signature to be on the AST. In short I want choice to reject any I consider unsuitable. I am surprise you ran up such a large legal bill, I would have expected you to be advised on the option to go for a S8 possession due to rent arrears. Link to comment Share on other sites More sharing options...
Mortitia Posted May 24, 2011 Report Share Posted May 24, 2011 Hi Ted, Was this let on an AST? Did it not have a break clause? Beats me why so many agents and tenants want to do such long contracts when they could go periodic or was this the agent trying to lock the tenant in so he could get his money? In future insist on 6 month contract or 1 year with a 6 month break clause. Mortitia Link to comment Share on other sites More sharing options...
Richlist Posted May 24, 2011 Report Share Posted May 24, 2011 In future insist on 6 month contract or 1 year with a 6 month break clause. Mortitia, Break clauses are a BIG problem area. There are lots of different ones available and many are poorly drafted, ambiguous, and unable to stand up in court etc. At very least we should be advising landlords to use a break clause that has been tested in the courts.......many haven't and many don't make sense. Link to comment Share on other sites More sharing options...
Grampa Posted May 24, 2011 Report Share Posted May 24, 2011 I dont touch break clauses. I either do a clear 6 or 12 month tenancy. I a lot of contracts with break clauses are very "wordy" and are not very clear on the correct way to use/serve s21. Link to comment Share on other sites More sharing options...
tedrogers Posted May 24, 2011 Author Report Share Posted May 24, 2011 Thanks for the replies - 2 years, no breaks, and yes agent then got 2 year fee up front. However agent did refund the pro-rata fee from the point the tenant agreed to leave after S8 - 6 mths in. Yes did an S8 but T wanted out anyway as they had no money. Costs were racked up by tenant almost going to court over spurious claim and then backing out (trying to scare me off counter-claiming for deposit and missing rent) , barrister costs and costs of preparing full bundles, unrecoverable, misery. So out of pocket lost rent (that return of deposit didn't cover) and legal fees, a lot. Any thoughts on complaint letter to agent, am I just whistling in the wind or is there a duty of care or minimum requirement for the agent in the case of self employed tenants - bare in mind i needed fully managed as am overseas and the pitch was that they would deal with everything - I only actually got involved when the tenant served court papers on me! Link to comment Share on other sites More sharing options...
Grampa Posted May 24, 2011 Report Share Posted May 24, 2011 My question is why 2 years?? I cant see it being in the clients (you the landlord) best interest to do a 2 year tenancy for a new tenant unless its a money making exercise. Link to comment Share on other sites More sharing options...
tedrogers Posted May 25, 2011 Author Report Share Posted May 25, 2011 yes two years gave the agent a big payout upfront and to be honest I naively thought this would give me some visibility and stability whilst I was abroad, in hindsight I realise that was an error and I shouldn't have listened to the agent any thoughts on the main query? "Any thoughts on complaint letter to agent, am I just whistling in the wind or is there a duty of care or minimum requirement for the agent in the case of self employed tenants - bare in mind i needed fully managed as am overseas and the pitch was that they would deal with everything - I only actually got involved when the tenant served court papers on me! " Link to comment Share on other sites More sharing options...
Carryon Regardless Posted May 25, 2011 Report Share Posted May 25, 2011 'My thoughts' are that there would be a responsibility on you to understand the contractual obligations of the LA. Prior to engaging him it would be reasonable for you to understand the terms of business / contract and approve. Even with intensive referencing and good experience we find ourselves stuffed by bad T's, it really is a difficult thing to guarantee. If your LA gave you guarantees and failed on them, then I would imagine you have cause for claim. If not it could just be seen as you being unhappy now things didn't go your way. The 2 years increased your risk but you write that "in hindsight I realise that was an error and I shouldn't have listened to the agent", so you had choice. It also follows that as there was choice here you could have said show me the references first for assessment. 'My feeling' is that to claim you will be throwing good money after bad due to your anger and resentment. The LA doesn't seem to have your interests at heart though. Link to comment Share on other sites More sharing options...
Mortitia Posted May 25, 2011 Report Share Posted May 25, 2011 Richlist - I don't think I need to be involved in 'we' - my view is my own personal opinion and obviously not yours. I have successfully let on 1 year contract with 6 month break clause in London for the last 11 years and never had any grief. I do agree that some clause are poorly drafted but it is up to the landlord to read and understand what is being signed. Ted - the defence the agent will give is that you entered into a legally binding contract with him/her but on the other hand you expected them to act responsibly in referencing the tenant. Self empolyds are always a concern. No doubt you have taken note not to enter into such a long contact again. If I think terms unreasonable I strike them out and initial in the margin on both copies of the agents contract. You are the customer so be ruthless - if agent does not like it go elswhere - there is loads of choice ( I only use agent for tenant find these days). Does this agent belong to ARLA or NAEA if so complain to them with copy letter you send to agent. Letter could go something like - 'due to poor referencing and actions on your part I am owed ££££'s in arrears and costs (list them) - if you don't make reparations withing 7 days I will issue proceeding in the small claims court to recover the damages. ' Check out small claims court and money claim online. There is a fee for taking out the procedure but if you win agent pays. Just check agent is solvent before your start. Mortitia Link to comment Share on other sites More sharing options...
tedrogers Posted May 25, 2011 Author Report Share Posted May 25, 2011 Thanks Mortitia, good advice all round . Yes they are ARLA and certainly are solvent Link to comment Share on other sites More sharing options...
Grampa Posted May 25, 2011 Report Share Posted May 25, 2011 Do you have any specific paperwork from that states the agent will do x, y & z for his fee. Also does the company web site state certain things. If so you then need to go through it and check if the agent did it or not and if not can you clearly put a price on what they didnt do and what it cost you. This is what you would need to take them to court and make a claim. Link to comment Share on other sites More sharing options...
partrim Posted May 25, 2011 Report Share Posted May 25, 2011 If the agents didn't fulfill their contractual obligations then you would have a case under contract law. You will need to check your agreement with them - did they undertake the referencing as per this agreement? In all likelihood the agreement will be fairly vague when it comes to how they go about gathering references and may also have a disclaimer stating that "whilst every effort is made... we cannot be held liable...". The second route would be to claim Negligence on their part. No doubt they market themselves as an expert in their field. As such they will owe a 'higher' Duty of Care to their clients. You have hired them partly as they can be considered experts in locating and referencing potential tenant. Did the references that they obtained and the advice that they gave relating to those references reflect that higher Duty of Care? There isn't a black and white test to this, but if you write a letter of complaint stating that you don't consider that the service they have provided has met the higher level of Duty of Care required, they may respond positively. It would potentially cost them more money to defend the case as it will to pay out, so it's definitely worth a letter with a bit of Legal jargon thrown in. A couple more points: i) Be prepared to negotiate on a settlement - it will encourage the Agent to settle, avoid the requirement for County Court (where anything could happen, including you losing the case and paying expenses to the Agent) and any recovery is better than none ii) If you plan to mention any settlement (including or excluding a specific figure) include the phrase 'without prejudice' in the heading of the letter. This way you are not tied to your proposal should the situation change in the future (e.g. you need to go to Court over this) Good luck! Link to comment Share on other sites More sharing options...
tedrogers Posted May 25, 2011 Author Report Share Posted May 25, 2011 Thank you Mr Casby, excellent advice, much appreciated Link to comment Share on other sites More sharing options...
partrim Posted May 26, 2011 Report Share Posted May 26, 2011 No problem - let us know how you get on. Link to comment Share on other sites More sharing options...
Guest caravanj Posted May 26, 2011 Report Share Posted May 26, 2011 Any one you employ to perform any work or service is expected to show reasonable skill & due care & dilligence so I think you could take action against the letting agent. It's no different to employing a plumber who floods your property. Link to comment Share on other sites More sharing options...
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