Letting Agent is not paying up

dirtbag_2

Our agent has not paid us any rent money even though he found tenants on the 5th Feb 2005. We chased him up mid March and he finally made a payment but the cheque has bounced and been returned to us "refer to drawer" today.
Are we within our rights to contact the tenants direct and make some other arrangement direct with them? The agent is not returning our calls and I don't think he is ARLA registered. We went with him because it was through him we bought the rental property. We have a copy of the AST.
Any help would be much appreciated.

frugal_dougal_3

Contact your tenants ASAP and ask them not to make any more payments to the agent, but to send them to you instead until you find a different agent.

If you do not receive your money from the agent you may have to consider recovering the money by suing through the County Court.

MarkyMarkD

Doubtless he's also holding your tenants' deposit, which will probably complicate matters. But as frugal advises, I would

(a) give the agent notice that you are cancelling your agreement with him for breach of contract (failing to pay money when due)
(b) tell the tenant that you've done so
(c) sue the agent for the money he owes you, making sure you don't forget about the tenant's deposit if applicable!

Small claims court proceedings are VERY quick and easy online.

Jay-Jay_4

Sounds awful but spare a thought for your tenants, they're probably going to be scared to death of losing their home. Make sure that you explain that it's the letting agent that you have the problem with, not them, that you will be recovering their money and that they don't have to worry about being evicted.

zzzLazyDaisy

The fact that he has bounced the cheque makes court proceedings even easier. There is no defence to a dishonoured cheque (apart from fraud on the part of the recipient of the cheque, which clearly does not apply here).

Write and tell him that you require payment of the dishonoured cheque in full, within 7 days, failing which you will commence legal proceedings in the county court for payment of the debt, interest, and court costs. Then do it (see example below).

Hopefully he will pay up, but if not, ask for judgement to be entered on the grounds of there being no defence (the court will tell you how to go about this)

Particulars of Claim for a Dishonoured Cheque
IN THE [TOWN] COUNTY COURT CASE No.
BETWEEN
[IVOR PROBLEM] Claimant
AND
[JUSTIN TIME] Defendant

PARTICULARS OF CLAIM

1. The Defendant drew a cheque on his account with Blankety Bank plc payable to the Claimant in the sum of £900.00.


2. The Claimant presented the cheque for payment but it was dishonoured.


3. By a letter dated 10th January 1999, the Claimant gave notice to the Defendant that the cheque had been dishonoured. The Defendant had stopped payment of the cheque which was marked "refer to drawer".


AND THE CLAIMANT CLAIMS

(1) £900.00.


(2) Interest pursuant to section 57(1) of the Bills of Exchange Act 1882 from the date of dishonour to the date hereof: .......... [see below]


(3) Interest from the date hereof to the date of judgment or earlier payment.

(4) Costs


Statement of Truth
I believe that the facts stated in these Particulars of Claim are true.

Dated this 26th day of April 1999

To the District Judge
and to the Defendant
SIGNED..........................[Claimant]
of [address],
at which address he/she will accept service of proceedings.



Rate of Interest

roger56

Try these links for helpful advice. Keeping your tenant informed is vital especially if your agent ignores your request to pass on information. Keep letters to the point and factual, don't include emotional statements:

This is tenant advice, give your tenant a copy to help them understand their rights
http://www.oft.gov.uk/NR/rdonlyres/36623FC6-E9BC-4D9A-B4BF-39191E06F802/0/oft381.pdf

Whether you agent is registered with ARLA or not, the advice given in ARLA leaflets is impartial and rational. Copy your tenant as well. Download the ARLA code of practice from here http://www.arla.co.uk/info/codeofpractice.htm

Do everything now in writing and keep records. If you can record relevant voice messages to you laptop or PC that can be helpful as well.

Lastly the small claims court is very good. You can do it yourself and the receptionists will help you through the process. They will not however give you legal advice.
Go here for basics:
http://www.hmcourts-service.gov.uk/infoabout/claims/index.htm
The documents you need to start the claim are
N1_eng.pdf which is the Particulars of claim
N1a_eng.pdf which are notes for claimant
N1c_eng.pdf which are notes for defendant

Finally, do try to resolve the issue with your agent first. State what you expect in writing and put sensible deadlines for answering. Keep records
of everything.

Good Luck, hope these are helpful to you and your Tenant.

EdInvestor

roger56 wrote:

Finally, do try to resolve the issue with your agent first.

Erm, have you checked the details of your agreement with the agent?It's quite normal for a number of fees to be charged at the beginning which often mean there is no rental income for the first month at all.Also, you may be affected by the accounting system the agent is using, especially if he is collecting rent on a weekly basis ( a good thing as it reduces the likelihood of the tenant spending the money!).

But money would not be disbursed to you until it is collected by the agent, and this may not neatly fall into a monthly pattern. This may means you have to wait for a while until the monthly rental income builds up to the appropriate level, which can have a nasty effect on your cashflow if you're not expecting it. But it doesn't necessarily mean something nasty is going on.

I would suggest you go and see the agent and go through the payment system with him to make sure you understand it.Alternatively, if you are thinking of moving to another agent, pick one and go through his payment system with him, to see if you can get any further information. Otherwise, if it is a misunderstanding, you might end up with the same experience twice.:(

dirtbag_2

Thanks to everyone for the great advice.

Thanks Editor but the amount due after all fees and disbursements was the amount on the cheque that bounced so no misunderstanding about the amount owed to us; he just did not have the funds to honour the cheque.

Not easy to go and see agent as he is over 200 miles away.

I am about to write to agent giving him 7 days to pay up or take legal action as explained by fellow money savers on this board.

Thanks again