renting out property with letting agent. Not receiving payment or communication.

NinjaD

Hi,

I have a 1 bedroom shared ownership property in London caught up in the cladding crisis.  I have been stuck with this property since we first tried to sell our share and move on with our lives in 2020.  But because we found out we had ACM cladding and lots of other issues with the building we could not sell.  Banks would not lend against the property meaning I have been stuck on variable rate since 2020 (I may be able to find someone to fix the rate now, but i'm hoping to sell as soon as it is fixed, which is always an ever moving date, so i do not want to fix the mortgage now as it may or may not be completed this year and I will want to sell as soon as i can without a mortgage fine). I have no faith it will be completed this year as every over deadline has been missed for the past 2 years).  When people came to view the property the exposed walls and scaffolding immediately scared them off.  The repair work originally started in 2020 and was due to be completed in September 2021.  We have since received regular delays and every completion date since has been missed, in fact the work has not recommenced. The flat just sits there surrounded in scaffolding with exposed walls looking very sad for itself.

We wanted to move away in 2020, but after contacting the housing association that own the other share we found out the flat was poorly built and we were stuck with waking watch.  We had a baby in 2022 and made the decision we could no longer live and had to move somewhere else.  The flat is on the top floor with no lift and a narrow stairwell.  Which makes it extremely difficult to get up and down the stairs with a baby, pram & shopping.  

Originally I sucked up the loss, by renting a second property & still paying over £1000/month towards this property (rent, mortgage (variable rate), council tax, energy bills etc).  Which was not easy with a new born child and my wife was made redundant during her maternity leave.

The issue
It got to the point where we were desperate to sell so that we did not have to spend so much money on a flat we cannot use each month & move on with our lives. It has been up for sale on Purple Bricks for almost a year with little interest due to the sorry state of the building.   Purple Bricks recommended I rent it out while I wait for the works to complete and recommended a letting agency which I agreed to.  

But this letting agency has been atrocious.  From the beginning I've had to keep chasing them for everything. I had to chase them for a contract. They finally sent me a document, riddled with mistakes. I said I can correct the mistakes and initial it, but I need to see the terms and conditions before I sign, they have never been sent to me.  So I have never signed anything.

They moved a couple into the property over a month ago.  I started chasing them asking, "how do you intend to pay me? Do you want my bank details" I finally got a response, "please email them to us".  I did.

Then I had to chase them to find out about security deposits, advance payment.  Surely they would have to pay a month in advance.  I eventually got a response saying something along the lines of:

Yes, they have paid a month in advance but because of the costs, you are in deficit so you will not receive a payment this month. We will deduct the deficit from your next rent.

So again, I had to keep chasing to get an invoice/statement. After a few phonecalls, I finally got sent across an invoice riddled with mistakes again.  

There's a £250 charge for PAT, Electric & Gas certificates. Which sounds expensive to me.  So I asked for receipts & the certificates, which they keep saying will be sent to me.  But I am yet to receive anything. I've chased 3 times already.

There's a £50 charge for tenancy deposit scheme securing.  I've been chasing multiple times for proof and again keep getting told it will be sent to me.  I went directly to the deposit company and they said there is no deposit secured against my property yet. 

There's a charge of £139200 for the entire 12 months management fee.  This should say £1,392.00.

When the local council asked me the details of who moved in, I asked this company for the tenants details to pass on to the council, but again they have never sent me any details. 

So as you can imagine I am getting extremely worried as they are useless and I haven't received a penny yet. 

When I originally kept chasing I was told I will be paid on the 15th of each month and should have it cleared in my account by the 18th.  

So by Thursday next week, I should have some money in my account, but judging by previous experience with this company I highly doubt I will

So by Monday/Thursday next week these are the steps I'll take:

• I'll have to start chasing the agency again. Trying to get through to them on the phone.  If I can't get through I'll write them an email telling them I want to cancel the arrangement and to get the tenants out.
• I will go back to purplebricks and complain about their recommendation.  I have already complained to them once, when I went weeks without being able to talk to the agency.
• I paid for a solicitor when we listed the property for sale (it's a pre-requisite when you try to sell a shared ownership property) I will ask for their advice. As they have been waiting over a year now for us to sell).
• Try and talk to the tenants directly to come to some arrangement. (I am almost 3 hours drive away from the flat, so it's very rare that I can get there).

Questions

1) What can I do if I do not receive any money, I will of course keep calling the agency. But it appears to be an individual woman with a virtual office who are unable to answer any questions.  So I always have to wait for the owner to call me. (Which rarely happens).

2) Can I go to the property and tell the tenants to stop paying her, and move out within 1/2 months? Or can i tell them to bypass her and pay me directly.  I have never signed a contract with this company because they never sent me the terms and conditions that it says I agree to. (I will be in London next friday visiting family (I am currently living almost 3 hours drive away) So I will knock and leave a letter to contact me if they are out. 

3) Is it likely that I will be able to get my money back from this company? Or should I try to get the tenants out and cut my losses.

4) Is it common practice to charge the full 12 months management fee upfront?  Especially as I have a 6 month break clause which I may enforce if the property is any closer to being in good shape to sell.

5) If I did enforce the 6 month break clause, would they have to refund me 6 months management fee?

I know this sounds like first world problems, but it is a nightmare within a nightmare.  Firstly we are unable to sell our small share because of the cladding crisis, so we are having to rent a cheaper property with our young child. We cannot make any plans for our future as all our money is paying for the flat & rental/bills on the second property.  Also because of the cladding crisis, we have no idea when the flat will be repaired and we will be able to remove this burden from our lives.

Thank you for any help.

NinjaD

I should also mention because of the cladding crisis the housing association that own the other shares have given us permission to sublet our share for 12 months.

eddddy

NinjaD said:

• I will go back to purplebricks and complain about their recommendation.  I have already complained to them once, when I went weeks without being able to talk to the agency.
• I paid for a solicitor when we listed the property for sale (it's a pre-requisite when you try to sell a shared ownership property) I will ask for their advice. As they have been waiting over a year now for us to sell).

Just a couple of comments...

• As an aside, it sounds like you were selling a problem property. I'd suggest that PurpleBricks was completely the wrong type of estate agent for that. You really need an estate agent who will be heavily involved pre-offer and post-offer for that.

• It sounds like you have a contractual dispute with the lettings agent. The solicitors that PurpleBricks introduced you to will be conveyancing solicitors (possibly Premier Property Lawyers) - I'm pretty certain that they won't advise you on contractual disputes.

• And if you want advice from any solicitor on a contractual dispute, you'll almost certainly have to pay the solicitor for it.

NinjaD said:

I had to chase them for a contract. They finally sent me a document, riddled with mistakes. I said I can correct the mistakes and initial it, but I need to see the terms and conditions before I sign, they have never been sent to me.  So I have never signed anything.

You don't need to sign anything in order to enter into a contract.

If they sent you their contract terms, and then you agreed to let them go ahead (by finding a tenant) - a court would almost certainly decide that you have agreed to their contract terms. (Probably without your initialed corrections.)

Normally, the contract itself  would be the 'terms and conditions' - are you sure that there's a separate document?

NinjaD said:

1) What can I do if I do not receive any money,

At this stage, maybe just wait and see if you get the money - before you start worrying.

In general, if people don't pay money they owe you, you make a court claim against them.

NinjaD said:

2) Can I go to the property and tell the tenants to stop paying her, and move out within 1/2 months? 

  You certainly can't tell them to move out within 1/2 months.

NinjaD said:

2) Can I go to the property and tell the tenants to stop paying her, and move out within 1/2 months? Or can i tell them to bypass her and pay me directly.  I have never signed a contract with this company because they never sent me the terms and conditions that it says I agree to. (I will be in London next friday visiting family (I am currently living almost 3 hours drive away) So I will knock and leave a letter to contact me if they are out. 


4) Is it common practice to charge the full 12 months management fee upfront?  Especially as I have a 6 month break clause which I may enforce if the property is any closer to being in good shape to sell.

5) If I did enforce the 6 month break clause, would they have to refund me 6 months management fee?

You should find the answers to all these questions in the contract you received.

NinjaD

Thanks @eddddy

No I chose my own solicitor.  I chose purple bricks & this particular solicitor combination, because a neighbour in an identical flat managed to sell using this combination at the end of last year.  So I hoped I would be just as lucky. Unfortunately, not. (I own a smaller share than they did).  

The document I received to sign was a "Residential Lettings Managed Service".  Which I immediately emailed back saying there are lots of mistakes (even the address is wrong) I cannot sign without seeing the aforementioned documents.

It does say: "I/We acknowledge that I/we will lose the right to cancel once a letting has been agreed with a tenant introduced by the Agent."  So judging by what you have said, I cannot do anything, even though i have not signed the document. 

I will just hope for the best, Thank you for your detailed response!

propertyrental

Post 9: Letting agents: how should a landlord select or sack?

Have you joined a landlords association? Maybe a good idea! (tax deductable).
https://thebla.co.uk/
https://www.nrla.org.uk/about-us

No you can't evict in 1-2 months. Read the tenancy agreement your tenants have (may be 12month fixed term!), and also read

Post 4: Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

km1500

Go into a high street estate agent, speak to their lettings dept, ask if they are able to take over the management of the flat and if so what the procedure is

£250  is about right for gas, electricity and PAT testing

NinjaD

£250  is about right for gas, electricity and PAT testing

Ok, thank you!

NinjaD

Post 9: Letting agents: how should a landlord select or sack?

Very helpful, thanks

NinjaD

No you can't evict in 1-2 months. Read the tenancy agreement your tenants have (may be 12month fixed term!), and also read

I would love to see the tenancy agreement that the tenant has signed, but it is near impossible to get any documents/communication from this letting agent.

Sarah1Mitty2

km1500 said:

Go into a high street estate agent, speak to their lettings dept, ask if they are able to take over the management of the flat and if so what the procedure is

£250  is about right for gas, electricity and PAT testing

Good advice.

macman

Did you not sign your own tenancy agreement? Or did you assign the right to the LA to sign on your behalf? I do hope not.
Using an agent does not divest you of any of the responsibilities of being a landlord. If they screw up, and there are numerous statutory breaches possible, then it's you that gets fined, not them. You are already liable to be sued for non-protection of the deposit for up to 3 times the value if the tenant is aware: there is no possible defence to this in law.
Given their utter failure to communicate, I would give them the notice required in their contract and terminate the agreement immediately. Very unlikely that you will recover any of the upfront fees paid though. 
You cannot commence an S21 eviction process during the fixed term. After that, the minimum notice is 2 months. But, should the tenant decide to remain after the notice expires, which is their legal right, then to gain a possession order could easily take 6m or more from that point.
Even once the minimum term expires, you will not be able to get an S21 until the tenancy is regularised, which means a protected deposit, GSC, EICR, EPC, 'How To Rent' booklet, and all the other statutory requirements that you need to demonstrate have been supplied to your tenant. The absence of any of these will invalidate your S21.
Given what you have said about the LA's performance so, far, I would not be confident that all of these have been served.