Rent out my property - is there a less stressful way?

busy_landlady

I own a flat which I recently let out via a lettings agent. The tenancy will end in a year's time and I will most likely have to look for a new tenant as the current one is a student from abroad.

I don't know if I was just unlucky or whether any other landlords experience the same problems. I had a potential tenant put a holding deposit down for the flat initially and 2 days before she was supposed to move in she backed out saying her circumstances had changed (got engaged and was moving in with her fiance instead), so I was left with no tenant. She had already signed the contract. The lettings agent that was dealing with this said as she had signed the contract she was bound and therefore had to cover the rent until I found a new tenant to replace her. She agreed, and I put my flat back on the market again.

About a week later another potential tenant was found by the second lettings agent I had marketing my flat. This time, this potential tenant put a holding deposit down and when she came to sign the contract said she realised she couldn't afford the rent and pulled out!

I phoned the other estate agent to let him know that this second person had pulled out and he said the first "tenant" wasn't going to cover the rent as I had already found another tenant to replace her. I told him this second "tenant" had pulled out and I wouldn't be in this situation had the first not pulled out and she had signed the contract.

Finally we agreed that the first "tenant" should pay for the week's rent that she would have been there - thereafter, the second "tenant" would have moved in, but as she had not signed the contract I got nothing. Both "tenants" that pulled out got their holding deposits back even though they are supposed to be "non-refundable".

I was left with a month's rent out of pocket as it had been vacant all this time whilst these people were messing me around.

What I want to know is where do I stand as a landlord in terms of holding deposits if potential tenants pull out last minute.

I want to be more organised with my arrangements for looking for a new tenant next year - I'm quite busy and didn't have much time to organise it this time round. My feeling is that perhaps registering with a few more estate agents might help me find a tenant quicker - especially if one is going to pull out, I'll have back up.

I signed up with a company yesterday that arranges these sorts of things - I started a thread with the hope someone might give me some advice, but it got deleted. I may have broken some "forum rule", sorry.

Potential tenants seem to beable to pull out at the last minute very easily and it leaves landlords like me significantly out of pocket. Is there anyway to stop this?

Brb

If you ensure your LA explains (and receipt shows the terms and conditions) that in the event that the T pulls out then the holding fee (don't call it a deposit as it can cause confusion) is non-refundable.

You are only ever entitled to keep it though if the T pulls out. If for some reason you chose not to let to a T then they should always be refunded (as much as a LA will stomp feet and cry about it).

It's worth noting that anyone can set up a LA business with no knowledge whatsoever of housing laws (or even how to treat ppl decently). To have 2 tenants pull out it's not normal as T stands to lose a lot of money. Makes me wonder if LA gave them cause for concern (maybe AST has nasty clauses in ?). Maybe T was finally told that every 6 months they'll be charged £200 renewal fee or something else equally nasty.

I would however have thought that as T2 had not signed an AST then T1 would still be liable though.

Good luck and check your LA is doing their job properly. Is their AST horrid to Ts ? (some can be as long as 23 pages!) with totally un-necessary and sometimes un-enforceable clauses.

sequence

Are you sure it's not the lettings agent ? Doesn't sound too competent!

I'd try a different agent . But being a landlord is a business and businesses can be stressful hard work.

sequence

How about sending a mystery shopper (friend ?) to check out your LA's procedures ?

Trollfever

Running a business that relies on incompetent third parties can be very costly.

busy_landlady

The first letting agent phoned to ask me what he should do with the holding fee and when I said it should be given to me as the tenant had pulled out, he then said I couldn't as the tenant might take legal action against me. I asked him did the receipt not clearly state it was not refundable - he said yes and that it was in capitals! So I asked what was his problem with me getting the holding deposit as it was clear in black and White that I should if the tenant pulled out. I suspected he wanted to keep the deposit as he wasn't going to get a fee from me after the deal had fallen through. I can't see how the tenant can threaten legal action as it was clearly stated and accepted by her that the holding fee was non-refundable.

The second letting agent told me they just gave the holding fee back when I asked what they had done with it. Again, they could've kept it themselves for all I know.

Both tenants that pulled out I received the contracts and signed them - they didn't strike me as anything out of the norm or in anyway unreasonable. My previous tenant was happy with her contract that was made through letting agent 2.

I really don't want the same thing happening again. Apart from putting my property on the market in good time for next year, I'm not sure what else I could do to prevent a vacant property.

tasha-debt

Im not sure where your flat is but I live in the South East and their is a major shortage of rented flats, average time from advert to contract is a week. So down here even if someone pulled out their would be someone else along straight away.

I would speak to friends who rent and see what agents they rent through and consider a new agent.

missile

One of my friends rents his flats via a company who guarantee him a fixed income and take care of all costs including voids and eviction of tennant should that become necessary. They charge 20% of his potential rental income and he feels that it is well worth it.

Jowo_2

Find a better agent. It's a fairly basic task to identify if a tenant is in the position to afford the rent way before they view or request a tenancy...

Generally, a holding deposit is not refundable to the tenant if they change their mind or fail the tenant screening. Seems the first agent has probably kept it instead of sharing it with you. How much was this deposit?

Both these aspects seem alarming to me.

Do they belong to a professional body? Here's some info on how to find a good agent - look at those that belong to professional bodies like ARLA.

http://www.landlordzone.co.uk/agents.htm

mlz1413

When was the holding deposit put down before or after references were taken? I'm assuming before which means your flat is not marketed for this period (ie making it a holding deposit)

Why do these LA do not take the deposit and first months rent at the time of signing the T&C's. I was made to when I rented.

I would go to the LA's and request they put in writing that you are entitled to any holding deposit if a prospective tenants pulls out during the referencing period. If they don't like it they find another LA.

madeupname1

busy_landlady wrote: »

The first letting agent phoned to ask me what he should do with the holding fee and when I said it should be given to me as the tenant had pulled out, he then said I couldn't as the tenant might take legal action against me. I asked him did the receipt not clearly state it was not refundable - he said yes and that it was in capitals! So I asked what was his problem with me getting the holding deposit as it was clear in black and White that I should if the tenant pulled out. I suspected he wanted to keep the deposit as he wasn't going to get a fee from me after the deal had fallen through.

The Estate Agent I dealt with told me that the holding fee is not for the protection of the LL but for the protection of the LA. Therefore, when my potential tenant pulled out, it was the LA that kept the fee. He claimed it was for the expenses they had incurred in credit checking the tenant. Absolute bull in my view, but since then I make sure that if a tenant wants me to hold a property for them, they must sign the contract, pay the deposit and the first months rent. If they don't want to do that, I keep marketing the property through other estate agents. Bottom line is that, until they have paid up they can change their minds.