Rent not paid - Estate agent DISSOLVED - my rights?

mr_wicket

Hi all,

Any advice on the following dilema would be much appreciated.

This is the situation:

I have a property under management with an estate agent. It was the estate agents responsibility to collect the rent and then transfer to our account, however we received no rent for the months of May and June this year. Unfortunately 2 months ago the company announced it was going to dissolve and go into administration. I know the owner of the company and he has given me the name of the accountants all monies are now being managed by and has said it could take a few months for this money to be released into our account.

We have received no written correspondence from neither the company nor the accountants. No updates, no timescales for monies coming through, not even any acknowledgment.

We went to speak to the tenant of the property and he has stamped and signed receipts from the estate agent for the month of June, but has misplaced the one for May. He showed us receipts for April and June and would have not been able to pay June if he hadn’t have paid May so we are certain he has paid.

What I would like to know is:

· What are our legal rights taking into account the circumstances?
· What are our legal rights based around the fact that we have a management and insurance based contract with estate agency?
· If we are required to continue waiting for this rent, can we sue for damages for the risk this poses to our mortgage payments?
· Should we communicate directly with the accountants and how should we approach them?

The tenancy on this property is due to end in one month’s time and we are now collecting the subsequent rent ourselves. The management fee that the estate agent signed a contract for also included rent insurance.

Any advice would be much appreciated.

Regards,

Andre

clutton_2

if you have a copy of your insurance policy contact the insurers as this may be the sort of eventuality it covered...

what is the point in suing someone who has just gone into administration... they will have no money.....

meantime.. since the tenancy is comign to an end you need to sort out your tenants deposit pronto.. find out which deposit scheme it is held in.. the tenant should know if the agent did things properly.....

then come back and tell us what you have found...

re accountants - ring them up and confirm that they are dealing with the matter and talk to the relevant member of staff.....


good luck

princeofpounds

Assuming that the company is being liquidated and run by the accountant as a receiver then you are an unsecured creditor of the company. You will be paid after any secured creditors. It is quite likely you will receive nothing.

The exception to this is if your money was held in a segregated client account in your name. Again, this is unlikely, but it is best practice for professional firms (estate agents unfortunately are not a profession as they have no official self-regulatory body).

If the company is wound up any contract you had with them terminates. Even if they breach the contract if there is no money there it is pointless suing for damages.

Any rent paid by the tenant to your agents counts as paid to you. They are not liable for any missing sums assuming they paid. You should issue written instructions to your tenant to pay yourselves directly - it seems he is already doing so but writing is best practice.

You should contact the accountant and see if it is indeed being liquidated, and under what sort of process, and if there was a client account or pooled money. It is particularly worth asking if the company was trading with limited liability or as a sole trader. If the former, the trail pretty much ends there.

Making a contract with a company with dodgy finances is just a risk of business I'm afraid.

tbs624

Not sure why you didn't get in touch with the administrators as soon as you knew the company was folding? It's best not to assume that the administrator will have a clear picture from day one, so creditors should protect their own interests at the earliest possible opportunity

As Clutton has said, you should also check out the situation with the T's deposit because you are ultimately responsible for its return, and its scheme registration, as required by law. Did the LA pass the deposit onto you, or did they "deal with it"? Do you know for definite that it has been scheme registered, which scheme was used and that the T has been given the scheme's prescribed information.

*Anyone* can set themselves up in business as an LA - they don't have to have any formal training, particular qualification or expertise and they are not subject to any regulation.


The "risks posed to your mortgage payments" when you don't receive rent payments ( either from T or from LA) are part and parcel of letting a property, unfortunately, and you either have to have appropriate insurance in place or a healthy contingency fund. Have you checked the insurance policy yet ?

theartfullodger

It would be reprehensible to suggest contact the directors of the failed company in person so I won't..

But if you spend £1 British with Companies House..
http://wck2.companieshouse.gov.uk/51b1ad5329fcf42554fd207c69855340/wcframe?name=accessCompanyInfo

You can get addresses of Directors: Occasionally these are office/solicitors addresses but very usually home addresses.

So, no point going round to see them to discuss matters.

No doubt as the company has gone bust they haven't any money either, not having bled the company dry at your & other Landlord's expense for the past few months. Aye, right...

Cheers!

Lodger

mr_wicket

Thank you very much for your detailed responses, it is much appreciated!

From your replies however it looks like I'm going to be in a bit of difficulty. I remain optimistic however.

I gather from your responses that my next steps are going to be:

1. contact tenant regarding deposit (which deposit scheme etc.)

2. check insurance docs and contact insurers

3. contact accountants and clarify information

Not sure why you didn't get in touch with the administrators as soon as you knew the company was folding?

It is a bit of a complicated situation why I did not go to the admins right away. In brief, there was no one to ask until just a few weeks ago, and even then the director said to email him, and he would liaise with the accountants. All I have been given is the accountants name. I dont know who the admins are. Will contact accountants first thing Monday.

meantime.. since the tenancy is comign to an end you need to sort out your tenants deposit pronto.. find out which deposit scheme it is held in.. the tenant should know if the agent did things properly.....

The agency dealt with the deposit so not sure why we are liable for it and how are we to know if it was dealt with properly? For the few years we have been renting we have not had to deal with deposits. I will contact the tenant asap and get on the case though.

what is the point in suing someone who has just gone into administration... they will have no money.....

I was referring to the admins. Does the responsibility to pay not sit with them now?

Will act upon advice and update as and when. Thanks again.

Andre

clutton_2

""The agency dealt with the deposit so not sure why we are liable for it and how are we to know if it was dealt with properly?"

in law the LL is 100% liable for the actions of his/her agent... if your ex agent has run off with your tenant's deposit it will be up to you to reimburse the tenant for the deposit.. best get saving.....

molerat

What are you and the tennant intending to do at the end of the current tenancy agreement ?

tbs624

mr_wicket wrote: »

TThe agency dealt with the deposit so not sure why we are liable for it and how are we to know if it was dealt with properly? For the few years we have been renting we have not had to deal with deposits. I will contact the tenant asap and get on the case though.

The LA acts on your behalf, and unfortunately, LLs do need to keep an eye on what their LAs do/ don't do in their name.

You can get confirmation either way, direct from TDS, DPS and mydeposits.

mr_wicket wrote: »

I was referring to the admins. Does the responsibility to pay not sit with them now?

It is likely that you will be sitting in a long line of unpaid creditors

princeofpounds

The agency dealt with the deposit so not sure why we are liable for it and how are we to know if it was dealt with properly? For the few years we have been renting we have not had to deal with deposits.

As has been pointed out before, from a legal point of view your agents almost are you, in the sense that when acting as your agent they act on your behalf. You ALWAYS had to deal with deposits, and you are ALWAYS liable for their actions or mistakes. It just so happened you delegated the tasks to a paid agent.

I was referring to the admins. Does the responsibility to pay not sit with them now?

No. The responsibility rests with the company you did business with. The administrators only take control of that company to try to pay creditors with whatever is left. Unfortunately for you, the administrators get their fees first, then the secured creditors, then the unsecured creditors (like you). Given there were likely to be few assets and a lot of liabilities (like your missing rent) then most probably there is nothing left - the directors probably sucked as much as they could out paying themselves and their staff before giving up.

Of course, it's always worth checking the company really is in administration, although it probably is.

mr_wicket

[FONT=&quot]Once again, thank you all for your advice[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]There have been several updates in regards to this situation and subsequently some more advice would be much appreciated. Updates are as follows:[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]1. [/FONT][FONT=&quot]Contacted both tenants and have now renewed tenancies/contracts privately.[/FONT]
[FONT=&quot]2. [/FONT][FONT=&quot]Contacted the DPS and they have located the deposit for one of the flats but not the other. I have spoken to the tenant about this, and he has proof he paid the agency the deposit and the agency even registered the tenancy with the DPS but seems like the money was not transferred.[/FONT]
[FONT=&quot]3. [/FONT][FONT=&quot]The agency that dissolved has now re-branded, is in exactly the same location as before, and has some of the same staff, including the previous owner who now claims he is just a ‘worker’ and the ‘re-branded’ company bought him out. There is supposedly nothing he can do about the 2 months rent that we didn’t receive.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Just wanted to see where I as landlord stand in regards to the second point? The landlord and DPS have proof that the deposit was paid in to the now dissolved agencies account. I as landlord had no involvement in this process. [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]From what I gather from some of the responses I am still liable for this deposit? It doesn’t make sense to me that I would as it was totally out of my power. Could someone please clarify with some evidence? The previous owner of the agency thinks I am not liable and he would ‘defend’ me if any problems occurred.[/FONT]