Where did all my rental income go!!??

koppite412

I am renting out my house for the first time and have now received my first statement of rental income from my agent. I have signed the agent to maintain everything so I was not surprised to find the management fees and set up fees deducted from the rental income.

What does surprise and confuse me is something right at the bottom of the statement called a 'General Reserve for the Property' which is 'held' by the Agents accounts dept and transferred to the opening balance of the next statement. This is huge, amounting to 50% of my potential rental income and leaving me with a poultry £65 income for the first month.

Does anybody else know if this is normal?!? Has anybody else as a landlord experienced their Agents seemingly witholding rental income?

I can't see anything in the agreement that an amount like this would be witheld, so any inspiration from you lovely people out there would be greatly appreciated before I either A) go to war on them tomorrow or make a pratt of myself!!

Thanks in advance

DVardysShadow

Are they also responsible for carrying out repairs? If they are this may be cash in hand for that. Ask them to explain.

koppite412

Hi, thanks for your reply. They are responsible for repairs but only after I have been contacted and approved.

theartfullodger

What does your contract with the agent (the Landlord <=> Letting Agent contract, not the tenancy agreement) say about them holding onto your money like this??

I'd think if it ain't in that contract they've overstepped the mark..

Cheers!

Lodger

annberlin

Our agents did the same thing but advised us of this beforehand.They keep it just incase repairs need to done to the property.In our case a wobbly tap in the kitchen. Anyway, you should see full rent less management fees next month

freezspirit

Yep I was going to say a property maintenance fund. But they would of explained this to you before hand if they did it.

Sue_S

Our LA has always held back £200 of the rental income from the first month's rent. This is for minor repairs - they pay the invoice and then make the 'holdback' up to £200 the following month.

We are on the same agreement as you, ie the LA lets us know about any problem before carrying out a repair so that we can either do it ourselves or call on our own workpeople.

I suppose the problem would be if there was an emergency and we couldn't be contacted. Anyway, I believe it's common practice (we have been letting for 10 years and it's happened with all the LAs we've used).

koppite412

Thanks for your help on this guys, seems I'm not alone and that kind of makes me feel better.

So from what people are saying would I be right in saying they only use the £200 retention IF there is a problem?

Seems to me like my contract says they will inform me prior to any work and therefore they would not need a slush fund to pull from?

How does the refund work in the second month of rental?

Thanks

Sue_S

koppite412 wrote: »

Thanks for your help on this guys, seems I'm not alone and that kind of makes me feel better.

So from what people are saying would I be right in saying they only use the £200 retention IF there is a problem?

Seems to me like my contract says they will inform me prior to any work and therefore they would not need a slush fund to pull from?

How does the refund work in the second month of rental?

Thanks

There is no refund, they continue to hold the £200, you take the hit on the first month's rent. The second month they pay you the regular amount. The £200 is the "slush fund".