Finding Fee - Bad Tenants

Fire_Fox

PeppasMum wrote: »

Thanks for your replies.

I'm afraid it does look like we have been taken on a ride by the letting agents. Having checked the contract, there is nothing in there that will allow us a refund. I'm furious though that in reality it is beneficial for them to recommend bad tenants for us as they can charge us to replace them again!

We have copies of the tenants references and they have come back 'clean'. However, I just can not get over the fact that the tenant was recommended on such a low income Vs the rent. There is no way she could have afforded it without financial assistance from the guarantor. I just think this is very poor business conduct regardless of the contract.

The tenant is also very young (well 21) so I imagine, it is more difficult to run up a poor credit check if you have only been financially active for a few years!

We are feeling very dupped by this - we don't even make any money on the renting the flat - we only do so as it is in negative equity so we cant sell it for now - it is actually losing us a small amount each month. Plus, I am having a baby in 7 weeks!

We do have the deposit in a tenancy scheme, but if she doesn't pay the final rent which looks likely, we will not cover our Finders Fee plus the missed rent :-(

I have contacted Arla to see if they can advise anymore as the Letting Agent is a member....

The letting agent did find you a tenant and at this stage you are not out of pocket, nor likely to be as you have a guarantor. It does not seen reasonable to me to expect the agent to pay back the finders fee and the tenant to pay for finding their replacement, this leaves you in profit! The fact that you are making no money out of letting the flat is a red herring, that is your problem not the tenant's or agent's.

Are you dealing with the tenant in writing by recorded delivery, setting out what they will owe you when they vacate? I would copy the letter to the guarantor being explicit they will need to make up the shortfall. Bills are not your problem providing YOU closed all the accounts in your name when you left the property - did you ring through closing meter readings and speak to the council tax office?

PeppasMum

I appreciate that Clutton.

The tenancy deposit will only cover 1 month rent which has not appeared anyway this month, so we will have to get the reletting fees from the court process aswell.

Not an easy business!

DVardysShadow

Fire_Fox wrote: »

The letting agent did find you a tenant and at this stage you are not out of pocket, nor likely to be as you have a guarantor. It does not seen reasonable to me to expect the agent to pay back the finders fee and the tenant to pay for finding their replacement, this leaves you in profit! The fact that you are making no money out of letting the flat is a red herring, that is your problem not the tenant's or agent's.

Sorry, FireFox, I disagree on this. LL paid finder's fee for a tenant for a year. T has walked away before the year is up, so LL must pay another finder's fee [albeit hopefully cheaper and with a better agent]. Although not the whole finder's fee should be reclaimed, it should be reclaimed in proportion to the unexpired tenancy.

PeppasMum

Thanks for your reply Firefox.

The tenant is due to pay for reletting fees as she is leaving before the end of the contract is up and there is no break clause. It was a fixed contract for 12 months of which she has only paid for 4 months. The reletting fees are written in the contract. From a legal point of view we are entitled for her / and guarantor to cover the full remaining 8 months rent. We would have to enforce this via court order, but do not feel this is worthwhile as she clearly can't pay and we are doubtful we would get the money.

Regarding the agents fees, the minimum we would expect is for them to refund 8/12 of the finding fee. They found us a tenant for a contracted 12 month period of which she has only stayed for 4 as she has breached the contract. Several EA we have spoken to do operate this way, but this one does not.

It is secondary the fact that I personally feel that she was not credit worthy due to earning £12000 per year and the rent being £700. But I accept it is our fault for not checking the paperwork before agreeing with the agents. I find it unreasonable to assume that a guarantor will pay part of the rent each month which clearly would almost certainly have to be the case with the income / rent ratio that the tenant had. I just think is poor business conduct...

We certainly won't be in profit as the rent is outstanding this month so the deposit will only cover this and no more.

clutton_2

do you have an address for the guarantor and was that person credit checked... its one thing getting a court judgement for debt... its entirely a different thing getting the money out of them.....

LittleJane_2

i would ask around for a tenant ( word of mouth is great) or an ad in local paper and then i usually introduce the tenant to the agents to do the security checks cheaper this way.

delain

PeppasMum wrote: »

Thanks for your reply Firefox.

The tenant is due to pay for reletting fees as she is leaving before the end of the contract is up and there is no break clause. It was a fixed contract for 12 months of which she has only paid for 4 months. The reletting fees are written in the contract. From a legal point of view we are entitled for her / and guarantor to cover the full remaining 8 months rent. We would have to enforce this via court order, but do not feel this is worthwhile as she clearly can't pay and we are doubtful we would get the money.

Regarding the agents fees, the minimum we would expect is for them to refund 8/12 of the finding fee. They found us a tenant for a contracted 12 month period of which she has only stayed for 4 as she has breached the contract. Several EA we have spoken to do operate this way, but this one does not.

It is secondary the fact that I personally feel that she was not credit worthy due to earning £12000 per year and the rent being £700. But I accept it is our fault for not checking the paperwork before agreeing with the agents. I find it unreasonable to assume that a guarantor will pay part of the rent each month which clearly would almost certainly have to be the case with the income / rent ratio that the tenant had. I just think is poor business conduct...

We certainly won't be in profit as the rent is outstanding this month so the deposit will only cover this and no more.

Was the tenant on LHA? What size was the flat? Did she have a child? If she did then she should have been in receipt of tax credits, and this is all income.