Rent in arrears - can letting agent take commission from deposit?

schamb_2

My tenant is about 4 months in arrears and has now moved out. There was an £825 deposit owed and the letting agent gave me this the other day less their commission and vat. Is this correct? I know the deposit is being used to pay rent, but it is also being used to pay for some of the upkeep needed within the house now that the tenants have moved out. Is the agent within their rights to do this? I was under the impression that the deposit could not be touched by letting agent? They haven't been paid by tenant either as obviously their cut came out of the rent which hasn't been paid.

DVardysShadow

schamb wrote: »

... I know the deposit is being used to pay rent, but it is also being used to pay for some of the upkeep needed within the house now that the tenants have moved out. Is the agent within their rights to do this?

You really need to be precise here. Is it upkeep against fair wear and tear or is it actual repairs and replacements which are chargeable to the deposit?

To my way of looking at it, you should receive genuine charges to the deposit in full. The rest counts as rent and will be subject to your contract with the Agent.

BitterAndTwisted

I think you need to have a close read of your contract with the agent as I'm sure that they've written in a nice useful-to-them-only clause in there allowing them to snatch your tenant's money out of your grasp.

This is assuming that the rental started before April 2007. Did it?

BitterAndTwisted

Oh, and another thing: how is this commission described? Are they deducting it for commission they haven't earned because they didn't collect the rent?

schamb_2

The rental started in Feb 10.

There is probably about £200 worth of upkeep etc on the house - 2 x bedroom carpets to replace, repainting of walls, replacing of lino in hallway etc.

I am not sure how the commission is described as they haven't sent me a statement yet - just confirmed on email. I am assuming that commission was taken out of deposit in lieu of commission not received over last 4 months but I was of the understanding that deposit money was a seperate entity and protected and therefore could not have money deducted from it?

G_M

Well, strictly speaking the deposit is money which belongs to the tenant and is held for them by the landlord. If at the end of the tenancy the tenants owe the landlord money (ie for rent, damage etc) then this can be deducted by the landlord from the tenant's deposit before return (subject to negotiation/arbitration by the deposit scheme).

Seperately the landlord owes fees to the agent for the services they provide.

I suspect that what follows from the above is that the deposit should be released in full to the LL (assuming of course it is not owed to the tenant which appears clear in this case), and the agent should then bill the LL.

The agent appears to have made a decision to facilitate all thisby deducting their fee.

You could contest this, either by following the agent's internal complaints procedure or in court, but there is little point unless you dispute the agent's right to the fee, which you might if you feel they were in some way calpable for the tenant's non-payment. Or because the wording on your contract with the agent is that they are due a fee on rent received. Read the contract carefully.

DVardysShadow

schamb wrote: »

... There is probably about £200 worth of upkeep etc on the house - 2 x bedroom carpets to replace, repainting of walls, replacing of lino in hallway etc.

Calling it 'upkeep' is irrelevant and avoiding making the distinction which might help you. Was any of it damage chargeable to the deposit?

schamb_2

Yes it was all chargable to the deposit. The house had been fully renovated prior to the tenant moving moving in this time last year.

DVardysShadow

OK, if you spent £200 on new carpets and lino, then the quality must have been quite cheap, so 3 years life max. And you are 1/3 of the way through their life, assuming they were new at the start of the tenancy. Chargeable to deposit £130. The rest will be 'betterment'. Agent owes you commission charged on £130.

G_M

The delapidation / repairs discussion seems academic. Surely the 4 months rent arrears is greater than the deposit? So the deposit can be retained by the LL.

The issue is whether the agents can deduct their commission from the deposit before passing it to the LL.

DVardysShadow

G_M wrote: »

The delapidation / repairs discussion seems academic. Surely the 4 months rent arrears is greater than the deposit? So the deposit can be retained by the LL.

The issue is whether the agents can deduct their commission from the deposit before passing it to the LL.

Dilapidations vs repairs is far from academic here. It is central to the question of whether the Agent should deduct from the deposit. The first call on the deposit is for repairs to chargeable damge, on which the Agent, as I see it, has no right to charge commission. A good tenant, up-to-date with rent might choose to pay in cash for a new carpet they had damaged and receive back the full deposit. No commission would be chargeable for this.

The OP is muddying the waters by lumping dilapidations and repairs together - and betterment too, to their own disadvantage.