Letting Agent claiming back 8 months rent already paid to landlord

dln

The following email received from my letting agent says:

"Unfortunately your tenants of ?? ???? Avenue have recalled 8 months rent totalling £3800

This amount less our management charge has been paid to you over the period.

We are now trying to trace your tenants for repayment.

Should they fail to repay I would then be asking you to return the monies paid to you. We of course will assist you in any way we can to recover the said monies.

Please contact me with any queries you may have, either by email or telephone

I hope we can resolve this quickly"

Can the agent do this? Has it happened to you?

Should this be between the tenants and the bank and not involve me?

If the tenants have done this and the bank has taken the £3800 out of the agent's account, should that be between the bank and the agent and not involve me?

If this has happened to me then it can happen to all you landlords reading this!

Can anyone advise me as to my position?

Thank you.

HappyMJ

What ever has happened here? Did the agent not get the money as cleared funds? Did they deduct the rent from the tenants account as a direct debit?

Do your tenants still live in the property? I'd be getting on to them as a matter of urgency and getting them to pay you by bank transfer or you'll issue a Section 21 notice.

JuicyJesus

An important thing I'm curious of: How was the rent paid to the letting agency? If it was by standing order or bank transfer then I'd be interested to know on what grounds this money was recalled - the ones that spring immediately to mind are that the tenants disputed setting up the standing order at all or considered it fraudulent, and therefore their bank refunded the monies to them and claimed them back from your agent's bank; if it was by Direct Debit it's a lot more clearcut as the tenants have rights to dispute payments under the Direct Debit guarantee for a whole host of reasons (with the good news that the agents can contest any such claim), but it is extremely unlikely that your tenants paid by Direct Debit.

Did you have any dispute with these tenants? Are you aware of anything that could prompt them to take this sort of action? I am aware also of scams where people are persuaded to report things like Direct Debits that have been taken for many years as unauthorised so as to get their money back.

From a liability perspective, I would imagine that you are liable to the agents and then the tenants are liable to you; if the tenants had simply never paid rent for 8 months, you would have not received any money at all. All this does is shift that months down the line. I would however get onto the agents and ask them to contact their bank to dispute the return of this money as it is funds legitimately owed, and at least get a reason for its being returned.

Add this thread to one of the many reasons I'd never consider being a landlord...

dln

Thanks for the message.

I only have the information in the email I posted. I don't know what has cleared and what hasn't and whether it was a standing order or direct debit.

The tenants paid 7 payments then defaulted. I was paid a further 2 months by my rent indemnity policy. During those those last couple of months the tenants left the property without telling anyone. I don not know where they are now although the agent told me he knows where one of them is and they are trying to contact them.

The tenancy was in two names.

Can anyone simply recall monies paid into the bank over a period of months?

agrinnall

dln wrote: »

Can anyone simply recall monies paid into the bank over a period of months?

Not really, I think even a return under the DD guarantee (which is quite unlikely to have been used for this anyway) ought to have been questioned by the bank in this situation.

Personally I think this is your LA about to go bust and trying whatever they can to get money before it happens so that the owners have funds to scarper with. I would not pay them anything until you have a great deal more information from them.

HappyMJ

dln wrote: »

Thanks for the message.

I only have the information in the email I posted. I don't know what has cleared and what hasn't and whether it was a standing order or direct debit.

The tenants paid 7 payments then defaulted. I was paid a further 2 months by my rent indemnity policy. During those those last couple of months the tenants left the property without telling anyone. I don not know where they are now although the agent told me he knows where one of them is and they are trying to contact them.

The tenancy was in two names.

Can anyone simply recall monies paid into the bank over a period of months?

If the agency deducted the money from the tenants account using direct debit then the tenant can claim the money back for a variety of genuine reasons.

dln

I don't know how the money was paid to the agent. They haven't told me.

I did not have any dispute with the tenants. They paid seven months rent and then I received a further two months from the rent indemnity insurance I have because they didn't pay any more. They then 'disappeared'.

Why would the bank give them back the 8 months rent they had paid?

JuicyJesus

dln wrote: »

Can anyone simply recall monies paid into the bank over a period of months?

Again, it depends on the method of payment and reason given, and I think you need to clarify both of those things with your agent as a matter of urgency. If it was a standing order then the only reasons I can really think of are that the tenants successfully disputed the standing order mandate itself (i.e. they said they hadn't authorised the payments.) If it's a Direct Debit, the tenant has numerous rights and can indeed put in such a claim for a whole variety reasons - that no advance notice was given, that insufficient notice was given, that the amount or date of collection differed from the notice...

I think agrinnall's suggestion that the agent is trying to pull a fast one is most likely however. I would ask for proof, because frankly I don't see any bank refunding their customer and pursuing an interbank claim for eight months' worth of rent paid by standing order without question.

dln

I am reluctant to name the letting agent because of potential come back.

They are one of Britain's largest. If they are about to go bust then I am the tip of the landlord iceberg and many thousands will be getting emails such as the one I received.

I doubt they are in that position.

HappyMJ

dln wrote: »

I am reluctant to name the letting agent because of potential come back.

They are one of Britain's largest. If they are about to go bust then I am the tip of the landlord iceberg and many thousands will be getting emails such as the one I received.

I doubt they are in that position.

You don't have to name them.

Largest LA in UK seems to be Countrywide and they are investing and appear unlikely to go into administration.

dln

Thanks, once again, for your advice.

I will ask the agent the questions you suggest.

If the bank has given back the tenants 8 months worth of payments (£3,800) then are they able to take that amount from the the agent's account? And if so, is the agent then able to come back to me for the rent that I have received over that period?