Letting agent not passing on 6 months rent

mustardseed6

Finally got the outstanding rent. Perhaps it was the letter of complaint that did it. Will have to wait and see if there is a response from the MD of the letting agent. Incidentally they are a national chain and members of ARLA.

Thank you for all your responses.

adg1

With rent in advance as the tenant I would be wary of letting it all go to the landlord.

The reason is thus:

If I pay 6 months/1 year etc up front and the landlord is in the process of losing his house/defaulting on mortgage/not got consent to let etc etc and I am forced to move out there is no provision for me to get my money back.

This happened to a foreign student friend of mine. Moved in, having paid rent up front for the whole tenancy of 9 months (student terms etc). The landlord was going through bankruptcy proceedings which they kept quiet about and subsequently lost the flat, friend lost the money and had no way of getting it back from the landlord.

If the agent had kept the rent and paid it to the landlord monthly there would have been little financial loss on the tenants side.

The main reason rent is paid up front is for security, so surely to see it in the agents account (a stable, not-going-bust agent) should be enough for most landlords. Especially if the agent ringfences it as G_M says above.

I admit there is generally a slim chance of this happening but it can, especially when so many people are being repossesed.

G_M

adg1 wrote: »

With rent in advance as the tenant I would be wary of letting it all go to the landlord.

The reason is thus:

If I pay 6 months/1 year etc up front and the landlord is in the process of losing his house/defaulting on mortgage/not got consent to let etc etc and I am forced to move out there is no provision for me to get my money back.

This happened to a foreign student friend of mine. Moved in, having paid rent up front for the whole tenancy of 9 months (student terms etc). The landlord was going through bankruptcy proceedings which they kept quiet about and subsequently lost the flat, friend lost the money and had no way of getting it back from the landlord.

If the agent had kept the rent and paid it to the landlord monthly there would have been little financial loss on the tenants side.

The main reason rent is paid up front is for security, so surely to see it in the agents account (a stable, not-going-bust agent) should be enough for most landlords. Especially if the agent ringfences it as G_M says above.

I admit there is generally a slim chance of this happening but it can, especially when so many people are being repossesed.

I said nothing about ringfencing. That was mustard!

Your point about a landlord defaulting on their mortgage, and repossession, is a fair one. The flip side is a letting agent going bust or absconding. As we've seen on this forum, that happens too! And the type of agent likely to do this is unlikely to have a proper 'client account' in the way that solicitors have to.

Additionally, paying rent upfront like this only tends to happen where the tenant may be unreliable in some way - has no steady income or has failed credit vetting due to previous bankrupcy or county court judgements etc.

So while there are possible risks of the landlord defaulting, or the agent absconding, the major known risk is the tenant.

As a LL, I'd not be happy with my agent holding my rent. Additionally it should be noted that any repossession through the courts following LL default on mortgage is likely to take at least 3, and up to 6 months anyway. And protection for tenants in these cases has recently be strengthened. So the tenant risk is minimal.

adg1

G_M wrote: »

I said nothing about ringfencing. That was mustard!

TBS624 sorry. That'll learn me for quick posting.

G_M wrote: »

Your point about a landlord defaulting on their mortgage, and repossession, is a fair one. The flip side is a letting agent going bust or absconding. As we've seen on this forum, that happens too! And the type of agent likely to do this is unlikely to have a proper 'client account' in the way that solicitors have to.

Both can obviously happen and its a risk all round with only the tenant trying to prove he's less of a risk I suppose.

G_M wrote: »

Additionally, paying rent upfront like this only tends to happen where the tenant may be unreliable in some way - has no steady income or has failed credit vetting due to previous bankrupcy or county court judgements etc.

Agreed. No credit history, defaults etc aside, it just keeps bringing me back to the whole debate on referencing on landlords/agents from previous tenants.