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

schamb_2

Sorry what does OP mean?

casperlarue

OP - Original Poster, the person who started the thread

moromir

I'm slightly confused... OP if you owe them the commission for those months... what exactly is the problem with them deducting it from the rental income?

You'll have exactly the same amount of money in your bank account whether its deducted from the rental income (what I would presume to be normal accounting procedure for an agency) or you issued a seperate cheque.

Have I entirely misunderstood the situation?

schamb_2

Sorry to have muddied the waters - I am rather new to all this and was merely after some advice. I mentioned to a couple of people that I had got the deposit back less the commission (including a lawyer who specialises in housing law) and the general consensus was that the deposit is protected and the letting agent was not entitled to any of that money. They deducted their commission from the deposit prior to having gone to the house to do a final inventory check. Surely this should have been done first and then an amount agreed on to undertake the various aspects necessary (carpets / walls / removal of broken washing machine / replacement of hallway vinyl / repair of broken window etc) and then the letting agent should have taken their commission from the remaining amount which would indeed go towards rent? On a seperate note if the rent has not been paid for 4 months surely this is the responsibilty of the letting agent - this is why I pay a letting agent commission, to collect rent and deal with the tenant etc and if no rent has been collected then surely this is the fault of the LA?

DVardysShadow

moromir wrote: »

I'm slightly confused... OP if you owe them the commission for those months... what exactly is the problem with them deducting it from the rental income?

You'll have exactly the same amount of money in your bank account whether its deducted from the rental income (what I would presume to be normal accounting procedure for an agency) or you issued a seperate cheque.

Have I entirely misunderstood the situation?

You have misunderstood. Rent was not paid and has been taken out of the deposit. But some of the deposit goes to damages. Commission is not payable on this to my mind.

schamb wrote: »

Sorry to have muddied the waters - I am rather new to all this and was merely after some advice. I mentioned to a couple of people that I had got the deposit back less the commission (including a lawyer who specialises in housing law) and the general consensus was that the deposit is protected and the letting agent was not entitled to any of that money. They deducted their commission from the deposit prior to having gone to the house to do a final inventory check. Surely this should have been done first and then an amount agreed on to undertake the various aspects necessary (carpets / walls / removal of broken washing machine / replacement of hallway vinyl / repair of broken window etc) and then the letting agent should have taken their commission from the remaining amount which would indeed go towards rent? On a seperate note if the rent has not been paid for 4 months surely this is the responsibilty of the letting agent - this is why I pay a letting agent commission, to collect rent and deal with the tenant etc and if no rent has been collected then surely this is the fault of the LA?

Yes, your are essentially correct as I see it on the point that the repairs and replacements money comes to you first and then the rest is taken as rent.

But do understand about 'betterment'. This comes entirely out of your pocket. Betterment will arise even if you replace like with like. Suppose you have a carpet with 5 years life and replace it due to a scorch mark after 1 year. You have lost a carpet with 80% of its life and should get 80% of no more than the price of the same carpet.

And I agree with you entirely, if the Agent has failed to get you the rent, he should not get commission on it. He has in fact charged you commission on the damage which is not acceptable.

schamb_2

I will bear in mind 'betterment' - frustrating though it is!! Don't really understand how tenants seem to get away with so much - seems very unfair that I haave to pay for someone to live in my own house and then pay court fees to get it back and them out!!!

BitterAndTwisted

Those are the risks of running a property business and that's why most landlords view it as a long-term investment. What sort of credit-checks and references were taken up about these tenants?

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 wrote: »

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.

You're right.

Though I also doubt the agent should be taking commission for rent that they did not collect. Depends on the T&Cs though.