Estate agent reduced rent without informing landlord

katieks

Hi, We'v just started letting out a property start of this month. Agreed rent was £925. Received payment from estate agents and they've only charged the tenant £900. When I queried this they said it was offered by the tenant and they accepted in order to avoid a delay of 10 days (which is the earliest date the alternative tenant could move in).

It doesn't say this is OK in the contract. I am loathe to cause too much of a stir as we've only just started with them, but I feel that they should take this loss, not me, as I was never involved in this decision. What do others think?

Bluebirdman_of_Alcathays

Fire the agent. If this is how dreadfully they commence the arrangement, is it really worth holding much hope for the future?

chucknorris

katieks wrote: »

Hi, We'v just started letting out a property start of this month. Agreed rent was £925. Received payment from estate agents and they've only charged the tenant £900. When I queried this they said it was offered by the tenant and they accepted in order to avoid a delay of 10 days (which is the earliest date the alternative tenant could move in).

It doesn't say this is OK in the contract. I am loathe to cause too much of a stir as we've only just started with them, but I feel that they should take this loss, not me, as I was never involved in this decision. What do others think?

Seems very strange that they would do that, although it doesn't look like there is any actual loss assuming that it is a 12 month contract, as 12 months x £25 rent reduction = £300 as would also a 10 day void (also it might have ended up more than 10 days).

If it was me I would make the point that they shouldn't make these decisions on your behalf, but on this occasion I would let it go.

nidO

Did you sign the tenancy agreement stating rent at £900?

If the agent signed it on your behalf after you'd agreed a rent of £925 with the agent, your choices are to either live with it (if you don't want to "cause a stir") or send a letter to the agent telling them that they're responsible for making up the shortfall you didn't agree to, and if they refuse, start small claims court proceedings against them.

booksurr

as explained by chucknorris their actions have been a very sensible move based on commercial reality

no it does not mean they are incompetent, far from it, they are in fact clearly very financially astute and appear to be putting both your and their financial interest at the front - as you'd expect!

yes they "should" have informed you, as they have exceeded their authorisation but the repercussions of their action are to your financial neutrality so why waste money on pursuing this matter and as for suing them :rotfl:

A stiff letter reminding them you did not delegate any decision making authority to them is all that is needed

mrginge

chucknorris wrote: »

Seems very strange that they would do that, although it doesn't look like there is any actual loss assuming that it is a 12 month contract, as 12 months x £25 rent reduction = £300 as would also a 10 day void (also it might have ended up more than 10 days).

Agreed.
However, after the fixed term ends the 10 day void is covered and the OP is then losing £25/month.

They of course can increase the rent (risking the tenant leaving) or negotiate a new fixed term which they will be no doubt charged by the LA for. So the LA's actions have effectively reduced the OP's ability to continue to an SPT at the same terms.

chucknorris

mrginge wrote: »

Agreed.
However, after the fixed term ends the 10 day void is covered and the OP is then losing £25/month.

They of course can increase the rent (risking the tenant leaving) or negotiate a new fixed term which they will be no doubt charged by the LA for. So the LA's actions have effectively reduced the OP's ability to continue to an SPT at the same terms.

The risk of the tenant leaving, isn't much of a risk that leads to a loss though, because if the risk was that that they couldn't obtain a higher rent after 12 months, then it is unlikely that they would have been able to obtain a higher rent 12 months earlier.

We have almost £5m worth of residential investment property, mostly on periodic tenancies, but it doesn't make any difference to us if they are on periodic or fixed term, we only offer periodic to offer flexibility to our tenants.

G_M

If you feel the agent was genuinely acting in your best interests to get a tenant in fast, and is otherwise efficient etc, let it go.

But I'd be pretty wary of an agent that took it upon themselves to ignore the terms of your contract with them, and their obligations to you.

You could force them to make up the difference, via the courts if necessary, but unless they immediately apologised and agreed I'd say the relationship was broke. End it.

Read:

* Letting agents: how should a landlord select or sack?

mrginge

chucknorris wrote: »

The risk of the tenant leaving, isn't much of a risk that leads to a loss though, because if the risk was that that they couldn't obtain a higher rent after 12 months, then it is unlikely that they would have been able to obtain a higher rent 12 months earlier.

True, but from the tenants perspective they may feel aggrieved that they agreed £900 and the OP then comes along immediately after the fixed term ends and pushes back up to to £925. The risk may be small, but the LA's actions have caused that risk to exist by taking a short term view. I don't call that being 'financially astute'

We have over £4.5m worth of residential property, ....

Really? I don't think you've ever mentioned that before

...mostly on periodic tenancies, but it doesn't make any difference to us if they are on periodic or fixed term, we only offer periodic to offer flexibility to our tenants.

That's my point. The OP is now in a position where he cannot just continue as is onto a periodic without taking a loss. I accept that it's unlikely to cause a major issue in the grand scheme of things, but this situation would at least make me wonder about who's actual interests the LA was really concerned about.

skintpaul

Surely EA has to make up the £25 shortfall? If property was advertised at £925, tenant knew what was needed to pay..

alchemist.1

skintpaul wrote: »

Surely EA has to make up the £25 shortfall? If property was advertised at £925, tenant knew what was needed to pay..

Tenant offered £900 and it was accepted.