Can letting agent keep full year's rent paid in advance?

propertyrental

You really need to find a different agent.

ArbitraryRandom

GDB2222 said:

Them refusing to hand it over rings alarm bells with me. Personally, I would be looking at the contract to see how I could extricate myself from their grasp. I would regretfully have to disappoint the new tenants.

They haven't actually refused yet if I'm reading correctly.

But from what we've heard so far does sound a little like the kind of thing a 'small local' agent might do.

Could be that if OP the were to be a bit less of an 'accidental landlord' (stop abdicating their decisions to the agent) then the agent would start acting more like an agent... 

bunnygo

stop right there. Two possibilities: (assuming England)

- the tenants are who they say they are, in which case you need to warn them that you will be issuing a section 21 after six months.

- the tenants are a front for someone you really don't want in the property.

the agents should ring fence the money. BUT if you think you can sell after six months with the place vacant then, you are taking a huge risk. The section 21 is two months notice of legal action. The tenants don't actually have to leave until the bailiff which can be up to a year later. If they want council help that is what they will have to do.

stop the rental process and start the sale process now. You are courting disaster.

GDB2222

bunnygo said:

stop right there. Two possibilities: (assuming England)

- the tenants are who they say they are, in which case you need to warn them that you will be issuing a section 21 after six months.

- the tenants are a front for someone you really don't want in the property.

the agents should ring fence the money. BUT if you think you can sell after six months with the place vacant then, you are taking a huge risk. The section 21 is two months notice of legal action. The tenants don't actually have to leave until the bailiff which can be up to a year later. If they want council help that is what they will have to do.

stop the rental process and start the sale process now. You are courting disaster.

I totally agree. By signing a one year contract and taking one year’s rent upfront, that signals very strongly to the tenants that they will have at least a year in the house. Even if there’s a break clause, they won’t have agreed to pay a year’s rent unless they expect to be there at least a year. 

So, at best for the OP, this is being extremely cruel to the tenants. And, at worst, the tenants refuse to leave, which is absolutely their right, and the OP has to go to court to evict them. That’s going to take 6-9 months, plus cost quite a bit in legal fees. 

I was really surprised when I read that the OP wants to let the house for just a few months. 

theartfullodger

Who is named as landlord on tenancy agreement?  You kids, mum or letting agent please?  All are possible and legal.  But they each give you, mum and agent different responsibilities and duties.

Becoming a landlord without some training is unwise.  I speak from experience.  Starting as a landlord I thought I knew everything.  Painful, expensive, long-drawn-out, tricky mistakes.  Oh my stupidity! Oh the hubris.  If not done any strongly suggest some education quickly.

macman

I'm curious as to whether the break clause can even be enforced if they have paid 12m upfront? It will depend on the wording of the TA. If it can't, then you cannot serve an S21 until the end of the full year. 2 months notice minimum, then maybe another 6m to if they don't vacate at the end of the notice period (as they are fully entitled not to do), and you have to gain a possession order and evict them.
What sort of LA takes a full year's rent upfront without even discussing it with the LL first, or even showing them the draft AST? Since the tenants are already in occupation, but you haven't seen it, it's assumed that you granted the LA a POA to sign the TA on your behalf as LL? If so, you have no idea what you have contracted to.
Who is actually named on the TA as the LL? You, or your mother?

GDB2222

macman said:

I'm curious as to whether the break clause can even be enforced if they have paid 12m upfront? It will depend on the wording of the TA. If it can't, then you cannot serve an S21 until the end of the full year. 2 months notice minimum, then maybe another 6m to if they don't vacate at the end of the notice period (as they are fully entitled not to do), and you have to gain a possession order and evict them.
What sort of LA takes a full year's rent upfront without even discussing it with the LL first, or even showing them the draft AST? Since the tenants are already in occupation, but you haven't seen it, it's assumed that you granted the LA a POA to sign the TA on your behalf as LL? If so, you have no idea what you have contracted to.
Who is actually named on the TA as the LL? You, or your mother?

Good grief! I hadn't read the thread closely enough. The tenants are already in occupation. 

bunnygo

really? In that case, too late. OP would be wise to do at least one visit (with notice and permission of course - tenants can refuse)  to check who is actually living there. Also to get clued up on all their responsibilities - buck stops with landlord not agent and agents are totally unregulated.

If the tenants are in OP is probably stuck with them for a year.

dimbo61

Welcome to the world of being a Landlord.
I hope and pray everything goes well for you and your tenants turn out to be a lovely couple who look after your mum,s home.
Many posters on here are Landlords or people involved in housing issues,  housing charities or legal advice.
Millions of people rent homes every day and there are thousands of good Landlords.
With a mountain of rules, regs and laws about Renting you need to do the right thing for your mum

Eebe

Oh my goodness.  Thanks so much for all your comments.  It has been quite eye-opening as you're all saying how we are responsible for everything whereas we thought employing an agent would be a good idea as they would look after it all for us (and charge accordingly).

To answer the various questions - Mum is the landlord on the terms of business with the agent (who is a national estate agent), so I assume will also be on the TA.

The situation was explained to the tenants up front so they are fully aware. We certainly aren't being cruel to them.  They were desperate to move in and my sister worked really hard clearing the house so that they could do it before Easter.  I'll be annoyed with the agent if accepting the rent means we're obliged to keep them for a year as we specifically wanted the option to end it after 6 months in case they are nightmare tenants.  However, I very much hope that the rental is a success in which case they can stay for as long as they want.

Mum has got between 1 and 2 years cash before we need to sell the house but her council offers the option of paying the fees until the house is sold so we're hoping she will qualify for that if necessary.