Managing agent withholding 6month rental is this legal?

doglover_3

Our tenannts have paid 6month in advance rental to our managing agent but we the landlord are getting monthly rent from the agent is this a normal procedure or where can i get the legal advice on this pls? Thanks.

pcwilkins

Depends what you agreed with the agent. What does your contract with them say?

Peter

doglover_3

Nothing mentions in the contract about if paying long term rental in advance i guess rare case, we have asked our agent about this and they told us its normal procedure for them to withold the money. The tenannts deposit is with the new deposit scheme with the agent.

pcwilkins

ts_aly2000 wrote: »

Erm, shouldn't that be in one of these proper holding accounts along with the deposit?

The deposit should be in a protection scheme --- no such scheme applies to rent paid in advance. What happens to rent paid in advance will be covered in the LA's t+c's.

Tell me that your LA has put the deposit into one of these accounts and that the tenants have been given full details of where it is.

An important question but not strictly relevant to the OP's problem.

If the answer to either of them is no and the tenant seems responsible then I'd ditch the LA. They're consistantly as bad as a troublesome tenant.

What, you'd ditch them even though they hold 6-month's-rent-worth of your money?

In any case, if OP has signed a contract with LA, he can't just ditch them.

Again I say, the situation will be covered by the contract between OP and LA. Just because T has paid 6 month's in advance to LA, doesn't necessarily mean that LA must pay 6 month's in advance to LL.

Peter

chocolatechipcookies

Are they apart of the tenancy deposit scheme? If not they are breaking the law.

But as far as paying you, they should do it monthly, eve if they have paid up front. You can always have a word with your LA, most are very helpful.

doglover_3

We were just wondering if it's legally printed somewhere where can we check as we are new with the rental thing, not only they have banked a big sum of money but also say the LA goes out of business what happens to the tenannts money and who will pay our rent? Unfortunaly Our LA are not aproachable at all when comes to this issues and we will probably not use them again in future.

carolt

Unless you specifically agreed to get the money upfront yourself, there may be little you can do at the moment. But I'd vote with your feet and ditch the agents in future - their loss not yours.

Notlob

I would discourage the LL to having the advance rent and the LA should put it in a client account. All that money seems very tempting to a LL, although the downside is what if the agent went bust. Not a problem if held in a client account.

If a LL came to me and insisted that advance payment be paid over, I would agree to do it as long as it was not part of the agreement with the tenant.

Were you not expecting rent monthly anyway?

mightymouse

Hi

If the tenancy agreement stated that there was to be advanced rental (say because of bad credit by tenant) then the money is the property of the LL and should be passed across by the LA.

If it is treated as deposit and refundable them it goes in a deposit scheme.

Either way the LA is probably NOT an Authorised deposit taker within the meaning of the Financial Services act. (imho)

doglover_3

Interesting reply we got from our LA manager today, the reazon they thought would be better for them to hold the full rental paid in advance was incase there was a major incident in the house and they had no funds with them and that at least they should keep 1month rental with them which to us sounds more reasonable though we have cover policies for everything.

Notlob

doglover wrote: »

Interesting reply we got from our LA manager today, the reazon they thought would be better for them to hold the full rental paid in advance was incase there was a major incident in the house and they had no funds with them and that at least they should keep 1month rental with them which to us sounds more reasonable though we have cover policies for everything.

If agents pass all the rent to you and they manage the property, how would they be able to pay contractors? Agents should hold a float anyway and keeping one months rent as a working float in this instance seems sensible.