Request for advice: (landlord) Issues with Letting Agency - Not sure on next steps

paulh1983

Morning all,

Was hoping someone might be able to give me some practical advice on my current position with the letting agency I'm using 

My property has been rented out to tenants for two years through a letting agency.  Earlier this summer I decided I was going to sell the property and through the letting agency the tenants were informed of such, but also that I would be happy for them to remain in the property once the annual tenancy expired on a rolling-tenancy until the property was sold.

The tenants opted to look for alternative accommodation, which is absolutely their right, and requested to leave the property a month earlier than the end of the annual tenancy agreement.  I went back (again through the letting agency) and said I had no issue with them doing so, however they would still be required to pay the final months rent as per the tenancy agreement.  I have written confirmation from the letting agency that this information was shared and agreed.

Unfortunately the house was left in something of a mess and required some remedial work doing which was then claimed back through the Deposit Protection Scheme.   This took place whilst in the final month of the tenancy agreement but after the tenants had vacated the property.   The letting agency recovered this money from the DPS approx. 3 weeks ago.

At the end of last month (for the final month of the tenancy) I received no final payment for rent.  I enquired as to this and it seems that the letting agency shut down the payment account for the tenants so no invoice was sent to the tenants.  Payment from tenant to the letting agency would have been due on the 1st of the month and payment to me from the tenant on the final working day of the month (30th).  I had no prior notification and warning of the non-payment, to the point it was only when I raised the issue with the letting agency on the 2nd Sept that they were even aware of the issue.

The letting agency have refused to acknowledge error in this, stating that the tenants still knew they would have to pay and have their bank details and the closing down on the system holds no relevance to the non-payment. When prompted on when the actual invoice would have been sent to the tenants, the agency have dodged the issue every time.  

The only fault the letting agency have admitted to is that they should have claimed the full DPS amount (the claim for the remedial work) was done mid-Aug.    

The letting agency are now stating that the most likely option is debt management, but that will incur a cost to myself to recover.  I have disputed this as the rent should have been collected whilst under the tenancy agreement with themselves, this is in the tenancy agreement.  The agency say they have contacted both tenant and guarantor but have not recovered the owed rent.

On the 3rd Sept I had still not received the money back from the DPS and was advised they would check with the accounts dept.  As of today (9th Sept), I've still received nothing and enquired this morning via e-mail but have received no response.

My initial thoughts were of having pursue this through the Property Redress Scheme, however having looked at online reviews it feels very much it's a members organisation which will defend their members.

I'm now thinking I might need to go down the Small Claims Court route.  Has anyone found themselves in a similar position and if so how did they resolve this?  Any advice would be greatly appreciated as this is causing me great stress and worry.

Thanks in advance.

Jami74

paulh1983 said:

The tenants opted to look for alternative accommodation, which is absolutely their right, and requested to leave the property a month earlier than the end of the annual tenancy agreement.  I went back (again through the letting agency) and said I had no issue with them doing so, however they would still be required to pay the final months rent as per the tenancy agreement.

Wonder if that caused some confusion for the tenant. I imagine usually if a tenant asks to leave early they probably mean leave the tenancy agreement early, not leave but carry on paying rent while you do work on the property.  

paulh1983

Thanks for your reply.

Yes, when the request was made I went to lengths to make sure the letting agency informed the tenants that the rent would still be required as per the tenancy agreement.  I have written confirmation that this was communicated and that they understood such.

I believe the tenants wanted to leave the property early as they had found somewhere else but didn't want to miss out.  

My issue isn't as such with the tenants not paying the rent, it's with the letting agency who have shut down the account early which hasn't prompted the tenants to pay (noting that legally they still should have made efforts to do so) and then failing to pick up the non-payment, which would have allowed time to claim the amount for the rent back through the DPS.

But also now that they appear to be withholding the money that is due back to me from the DPS (for remedial work).

Grumpy_chap

If I read correctly:

• The tenant's left one month before the end of the tenancy
• T did not pay the rent for that final month
• LL wants the rent paid
• LL used the final month to undertake repair work in the property - hence avoiding / reducing void.

The LL cannot use the same month twice.
Either that month is paid for by the T, and the T had right to return at any time in that month and stay in the property, so LL cannot undertake repair works.
OR the LL has access to undertake repairs, but that means the T cannot be there so no need to pay.


The amount withheld from the deposit will be forthcoming - chase the Agency and give this time.  Deposit cannot usually be withheld to cover missing rent.

saajan_12

paulh1983 said:

Yes, when the request was made I went to lengths to make sure the letting agency informed the tenants that the rent would still be required as per the tenancy agreement.  I have written confirmation that this was communicated and that they understood such.

Who exactly is the written confirmation from - the tenant directly or is the LA saying they told the T? I think you need to understand there is a chance you won't be able to recover the rent from the Tenant as the LA may not have communicated clearly to the Tenant and besides with you effectively taking control of the property for repairs access, the tenant may not owe rent anyway. 

Even if they do, your claim would be against the Tenant. You (likely) didn't have any guarantee from the agent, so at best you could complain to them for causing you the extra leg work. Possibly even a small compensation payment from them, but ultimately if the Tenant refused to pay with the account open, the agent's actions may have made little difference.  
u

Grumpy_chap said:

The amount withheld from the deposit will be forthcoming - chase the Agency and give this time.  Deposit cannot usually be withheld to cover missing rent.

No - the deposit is for damages (ie losses) that the LL incurs as a result of the Tenant. While this is often physical property damages, it doesn't have to be. Granted here there is a question as to whether the final months rent is due, but IF it is and the Tenant fails to pay, then it absolutely CAN be recovered from the deposit. 

Grumpy_chap

saajan_12 said:

Grumpy_chap said:

The amount withheld from the deposit will be forthcoming - chase the Agency and give this time.  Deposit cannot usually be withheld to cover missing rent.

No - the deposit is for damages (ie losses) that the LL incurs as a result of the Tenant. While this is often physical property damages, it doesn't have to be. Granted here there is a question as to whether the final months rent is due, but IF it is and the Tenant fails to pay, then it absolutely CAN be recovered from the deposit. 

Thank you - I stand corrected, everyday is a school day

I do think it is moot in this instance as either rent is due and the month of use of the property has to be available to the Tenant, or the LL used the month of use of the property to make repairs and not rent due.  It cannot be that the rent is due but the LL had use of the property.

housebuyer143

I think you should fight the agent on the issue that they didn't claim the arrears from the deposit (correctly claiming monies from the deposit is definitely part of their contract with you), so failing to notice the arrears and then to add it to the claim is a big mistake and you can prove that one. 
Yes, you might not get all the rent back but you should get them to cover the amount of the deposit that they could have claimed for rent. 

I doubt you have much luck tracing any then getting monies from the TT, especially because you don't know if the agent made it clear they needed to pay. I think your time is better spent pursing the agent for the loss that their actions caused. They can argue that they can't make the TT pay etc and that's true, but they can't argue away that they could have claimed it from the deposit. 

1. Closed account and didn't make rent due. 
2. This error directly resulted in an incorrect claim being made from the deposit and you being X out of pocket. 

As a thought  - is it Ruth DPS insured or custodial? If the latter, have the TTs agreed to the deductions and done so with DPS? If not, then it's probably stuck in DPS limbo.

Btw, it's very odd to start deposit release etc whilst a tenancy is still active. The tenant has every right to go back into the property if the tenancy is ongoing and therefore it's a grey area I think if you actually ended the tenancy by removing this option for them. 

HampshireH

When I was a tenant I never ever received a monthly invoice from the letting agent. My obligations were set out in the contract terms.

Perhaps they have avoided answering as it not something they ever did.

paulh1983

Thank you everyone, I've tried to reply individually to points.

@Grumpy_chap : 

Tenancy ran until end of August.  Tenants requested to leave the property end of July to move into new property.  I stated, through the letting agency, that if they left they would still be responsible for the rent for the full tenancy (end of August).  I have written confirmation from the letting agency that this was communicated and understood by the tenants.

I have chased the agency for the deposit and have had no response.  It has been sat in their account for 3 weeks now. 

The account was closed.  The letting agency's argument regards this is that it made no difference as the tenants should still have made attempts to pay.

@saajan_12 : 

Written confirmation from the letting agency, I've had no direct dealings with the tenants.  

@Grumpy_chap :

It was the tenants decision and choice to leave the property before the tenancy ended.  They handed the keys back, at the very least I would have had to go in and get meter readings etc.  I appreciate what you're saying about use of the property but I would not have agreed to them ending the tenancy early as it would have left (as it ultimately has done!) me without a months rent owed.

@housebuyer143 : 

Thank you, that's my train of thought - especially as the one thing the letting agency have admitted to is making an error in not correctly claiming the monies owed from the rent.  I'm unsure as to which path to go down with this, as per original message I've read very mixed reviews of PRS with a lot of people stating it's better to go straight to Small Claims Court.  I was just wondering if anyone has had similar experiences and could advise on a path to proceed with.

Unfortunately I'm unsure what you mean by Ruth DPS.  The letting agency are members of the CMPS and PRS.  My understanding is that the tenants agreed to the deductions and that the returned amount is with the letting agency.  

I didn't remove any option for the tenants to go back into the property.  They handed the keys back in themselves and no locks were changed until the tenancy was officially over.

@HampshireH

I previously always received a monthly statement that would state the day the invoice was sent to the tenants, the day they paid, the cut from the agency and then my final payment.

i.e 

July Invoice

July 1st - Tenant Invoice
July 3rd - Tenant Paid
July 31st - Agency % ££
July 31st - Payment to me

As the account was incorrectly closed down a month early no statement was forthcoming for this final month.


Thank you again for everyone's replies.

housebuyer143

@paulh1983

Sorry, typo. The DPS has two schemes custodial and insured. With custodial the money is actually with DPS and the agent doesn't hold it. I hate that scheme because you can't get the money out until the TT goes onto the site and physically agrees to it, even if they agree with you directly. 
The alternative is DPS insured where it's in the agents bank account and they can give it to you once the TTs agree in writing. 
Find out which one because I have a feeling it's the former. 

If they have admitted fault then take that opportunity to fight them for compensation in the form of the cost of the remaining deposit you could have claimed but didn't. Once they have given you that you might only be a few hundred pound out and you feel like leaving it rather than fight the TTs for it. 
I used to work in a letting agent and we paid out compensation like this for very similar errors. 

paulh1983

Thank you, that's incredibly helpful! 

The last communication I had from the letting agency (3 weeks ago) stated that payment was being processed and should be in their bank within a few days for transferring over to me.  That would maybe suggest the former (custodial) but that the tenant has agreed and signed it off?

From your experience of working in a letting agency, how would you best recommend proceeding with the seeking of compensation?  From my dealings with this particular letting agency they're very firm that they won't pay out any compensation and are very eager to shift any blame - which is why the admission of error here surprised me.   

They told me that they're pursuing unpaid rent through debt management but I'm getting no communication response at all from them.  I would normally be happy to just let it run it's course and wait for debt management to kick in, however their radio silence is what worries me.