Dodgy Estate Agent

sexysam

I recently (April 2009)used an estate agent to rent my house out. Having spent in excess of £1000 getting the gas, elecetric,HIP, Energy Reports/works etc, the EA let it out to a man who lives there with his daughter.
The EA has not recieved rent for 2 months from tennant. I approached EA last week to quiz them about the rent. The EA said teh tennnant has applied to local council towards cost with rent. I asked EA for copy of tennancy agreement. The agreement states the rent as beinfg £525 pcm , when in fact I told him it should be no more than £425 so it could be let out to someone who can afford the rent. The EA said the tennant wanted it that way for "Council purpose". I told him that that I didnt like this practice, and can I have a tennancy agreement showing £425pcm. The EA point blank refused this.
Am i entitled to a TA showing exact amount of rent, because I dont want to fall foul of taxman?. Is this Council purpose scam a common problem or what.? What can I do do to EA to make sure he gets rent for me on time?. Should I report EA if he is not playing it by the ball?.

Thanks

poppysarah

Seek legal advice immediately. You should get a half hour free.

princeofpounds

There is a lot you can do here.

Regarding non-payment of rent, there are two avenues to puruse. As the rent is 2 months overdue you can pursue a section 8 eviction and claim for rent arrears against the tenant (assuming it's not the LA stealing the rent). You may wish to issue a section 21 also, but this won't get them out until the 6 months point or the end of the fixed term of the tenancy, whichever is longer.

You may also have a case against the letting agent for negligence and/or breach of contract if you can prove they failed to follow procedure or disregarded their instructions/duties. You could therefore claim damages. Legal help will be useful in creating a proper case but if it's in small claims territory you might not get your legal costs refunded, so you might try to do it yourself (though it will be harder). You can also terminate your relationship with the agent as per your contract anyway.

Then you move onto the issue of the scam, which is separate. You don't yet know who is really skimming the rent - it could be the tenant asking for more benefit than he is paying, or it could be the agent, asking for more rent than he is transferring to you.

You can refer the agent to ARLA/NAEA if they are a member. You can also contact the local council housing benefit team, and the national benefit cheat hotline. You have to be a little bit careful because if you know about fraud (as you now do) and you facilitate it, you could be implicated (although the chances are pretty low). But on one level it's probably a good idea not to sweep it under the rug.

You will have to think quite carefully how you want to unravel this and what result you want in the end. If you want to follow up the fraud, you will probably need to gather written evidence which could be tricky. Also, pursuing any one avenue is likely to open up a can of worms which may cause other avenues to get harder to pursue.

Good luck.

tbs624

Have you signed a contract with this LA/EA? If you did does a specific rental figure appear on that contract? Your LA works for you not the other way around - if he is not working how you want to him work get rid of him.

Is the LA signed up to ARLA, NALs, OEA, UKALA? If he is, then make a formal complaint and also let the private sector rentals officer at the local council know about his business practices.

If your T is two months in arrears you can apply to the courts for repossession of the property. Are you sure that the T has not in fact paid it to the LA and the LA has simply now passed it on to you?

Currently, there is no statutory regulation for LAs - anyone, absolutely anyone, can set up in business and style themselves as an LA, handling thousands of ££ worth of your money and your property..

It is possible that your LA and your T are working in cahoots to make a fraudulent LHA claim and that is not something that any LL can afford to be part of.

Check what the LHA (local housing allowance) is for your area here. The T would be entitled to receive the going rate for two bedrooms but is allowed currently to keep £15 per week if the actual rent paid is a lower figure than that. If the original rent you wanted to charge comes in a good bit lower, then the excess difference between your fig and the LHA amount would be "lost" to the T, so by the T and the LA inflating the rent payable figure the T would get to keep a higher proportion. He may be intending to give the LA a backhander and/or the LA may be happy with an increase in the % fee that you would have to pay him on an extra £100 rent per month.

As poppysarah says, get some legal advice locally straight away: you may want to speak direct to the LHA officer too.

socrates

sexysam wrote: »

I recently (April 2009)used an estate agent to rent my house out. Having spent in excess of £1000 getting the gas, elecetric,HIP, Energy Reports/works etc, the EA let it out to a man who lives there with his daughter.
The EA has not recieved rent for 2 months from tennant. I approached EA last week to quiz them about the rent. The EA said teh tennnant has applied to local council towards cost with rent. I asked EA for copy of tennancy agreement. The agreement states the rent as beinfg £525 pcm , when in fact I told him it should be no more than £425 so it could be let out to someone who can afford the rent. The EA said the tennant wanted it that way for "Council purpose". I told him that that I didnt like this practice, and can I have a tennancy agreement showing £425pcm. The EA point blank refused this.
Am i entitled to a TA showing exact amount of rent, because I dont want to fall foul of taxman?. Is this Council purpose scam a common problem or what.? What can I do do to EA to make sure he gets rent for me on time?. Should I report EA if he is not playing it by the ball?.

Thanks

OK - looking at this from the outside - it looks like you have paid an agent a fee for finding you a tenant that is claiming benefits.

You could have - if you wanted - found such a tenant for free.

Probably the agent never told you the tenant was going to be claiming benefits. It may also be possible that he has also got a fee from the LA for this tenancy.

Basically a complete mess.

You need to start untangling this mess.

Here is what you need to do.

Firstly get your self to the Housing Benefit office and immediately get the claim for LHA suspended. Explain that you have been paid no rent whatsoever and if you are 8 weeks in arrears ask for the full LHA entitlement to be paid to you directly.

The difference in rent on the contract was probably in line with LHA entitlement. Do not worry about that part of the problem at them moment until you have a few more facts to hand - like what is the tenants LHA entitlement- by the sounds of it two bedrooms.

The agent has a hand in all this and in IMO is acting very very badly.

You need to fill in a lot more gaps to the story as well - for example does your lender allow you to rent to people on benefits, does your Buildings Insurance cover you etc. etc.

I would also park myself in the Agents Office until I got some straight answers.

Reporting the agent left, right and centre is all good but will take a lot of time.

There is also some good advice from the other posters.

socrates

One other thing that just struck me - was it the agent who advised you to get an electric certificate.

Only a Local Authority would demand this as part of a Rent Deposit Guarantee Scheme - where they pay one months rent in advance (TO YOU) and a certificate to cover the deposit.

What has the agent done with the deposit? - if he shows you the council deposit certificate - then you know he has received a fee from them - as well as you for this tenancy.

Why did you not have a copy of the original rental agreement?

I would love to bury this agent! Complete crook!

Batchy

probably means getting things PAT tested?

sexysam

Thanks for everybodys advice. I am somewhat more confused as what to do next. Shall I go to the Council and ask them what fees they have paid the LA particularly in regards to the electrical work which the LA asked me to do as its a requirement.
Or shall I confront both LA and Tennant and ask them exactly what is being charged and for what.

I just wish I hadnt agreed to this mess, all I wanted to do is to rent my house at a reasonable rent to someone who might be in distress. I spent a lot of money on improvement to ensure peoplke got theirs moneys worth for the rent that they were paying , only to find myself with a dodgy letting agent or tennant.

Can I say to both T and LA that once 6 months tennancy isup, I dont want anything to do with them?

socrates

sexysam wrote: »

Thanks for everybodys advice. I am somewhat more confused as what to do next. Shall I go to the Council and ask them what fees they have paid the LA particularly in regards to the electrical work which the LA asked me to do as its a requirement.
Or shall I confront both LA and Tennant and ask them exactly what is being charged and for what.

I just wish I hadnt agreed to this mess, all I wanted to do is to rent my house at a reasonable rent to someone who might be in distress. I spent a lot of money on improvement to ensure peoplke got theirs moneys worth for the rent that they were paying , only to find myself with a dodgy letting agent or tennant.

Can I say to both T and LA that once 6 months tennancy isup, I dont want anything to do with them?

Sam you are getting very confused - read my post above and follow those instructions - once you have suspended the claim we can untangle the mess from there.

You are not receiving any rent anyway - so at least this will stop whoever is getting the rent from pocketing it.

Do not get into the "I rented it for this and the contract says that" conversation. Just explain that you have not received a penny in rent and you want the claim suspended as you feel the money is being misused.

socrates

They would not have paid him a fee for the electrical work - they would have paid him a fee for finding a property for the tenant (this is me assuming at the moment anyway ) - the fact the LA told you you needed an electric safety cert. - tells me he knew what he was doing in terms of conning you - as it is NOT legal obligation - it is however a requirement of most Local Authorities - when they are housing a tenant in private accom. under a scheme where the LL gets some kind of incentive.

In this case the LA - (I believe) has pocketed it - he may even be in league with the tenant - knowing (mistakenly) that there is nothing you can do until the tenant is 8 weeks in arrears.

You can actually get the claim suspended from as little as 3 weeks .

ad44downey

sexysam wrote: »

Dodgy Estate Agent

That's the problem, 90% of them are well dodgy. I'm not too sure about the other 10% either.