Letting Agents money up front for work

slasherman67

Hi my letting agent is asking for money in advance of work to be carried out by a contractor, I asked for payment on invoice and the agent told me "Due to strict client account rules, we must hold the monies on file before instructing the contractor." I have been a landlord for a long time and I never heard this before. Can anyone confirm if this is correct?

Slithery

What does your contract with the agents say?

K_S

@slasherman67 When I used to employ an LA a couple of years ago, I needed to put £350 in a float for small repairs and if I wanted to engage them for larger works (I didn't, I arranged those myself), payment was due in advance. This LA was part of a large country-wide money-grubbing corporate group so I couldn't say if this is a common practice. 

moneysavinghero

Individual LA's can have whatever rules they want (as long as they are legal). Only the LA can confirm their rules - and it appears they have already done this.

user1977

It would be correct to say they can't pay out of their client account if you haven't put the money in to begin with...though I suspect more accurate for them to say that they CBA dealing with the hassle of a contractor chasing them for cash if you're still to pay up. I presume the contractors don't themselves want paid upfront?

Grumpy_chap

How much is the work that is to be done?
Can that be met from one month's rent?
Does the LA hold any "float" against your account?
EA's / LA's don't really carry large balances in their business as everything is built on smoke and mirrors.  They've probably had a LL in the past ask then to manage some large refurb works and then the LL does not have the funds and says to take it from forward rent.  The LA is not a finance provider.

slasherman67

no they are asking for the money BEFORE they instruct the contractor and stating it as part of "strict client rules". In the past it has always been deducted from rent. 

Grumpy_chap

slasherman67 said:

no they are asking for the money BEFORE they instruct the contractor and stating it as part of "strict client rules". In the past it has always been deducted from rent. 

How much is this work to be done?
Is it more than one month's rent?
Is this work on a property with a sitting tenant, or a property in the void period?
Letting Agents are not finance-houses.

user1977

slasherman67 said:

In the past it has always been deducted from rent. 

That only works if they receive enough rent to cover it. Perhaps recent events have caused them to reconsider.

starving_artist

slasherman67 said:

Hi my letting agent is asking for money in advance of work to be carried out by a contractor, I asked for payment on invoice and the agent told me "Due to strict client account rules, we must hold the monies on file before instructing the contractor." I have been a landlord for a long time and I never heard this before. Can anyone confirm if this is correct?

I've just had this from my LA.  It took me by surprise too but the property has been empty so there is no regular income to set the costs against.  I reluctantly agreed but I trust them and the contractor won't be getting paid until the work is done.