Is Your Letting Agent Holding Deposits Or Failing To Pass On Rent?

Before you get bent out of shape and start raging at your tenant for failing to pass on rent, it’s probably best to make sure your tenant is the actual cock-face that is breaking the chain of making rental payments.

Recently a pompous-arse rogue letting agent in Oxfordshire was raided after several dozen landlords and tenants complained about missing rent and deposit payments. Basically, tenants were paying rent on time to the agent, but the agent was failing to pass it onto the landlord. The agent was also holding security deposits, refusing to return them to the tenants. You can read the full story here, on the Oxford Mail website

Moral of the story, it’s not always the tenant that’s playing the cowboy role when the rent isn’t being paid.

The offices of James C Penny estate and letting agents, in Walton Street, Jericho, went under a six-month investigation after about 50 complaints were made by tenants and landlords concerning missing money. It is believed the complaints could total hundreds of thousands of pounds in rent and deposits.

It’s an interesting story, and I imagine they’re not the only agent in the country failing to pass on rent to the landlord.

Are you a victim?

If you’re a landlord/tenant that is experiencing similar problems, you’re advised to contact trading standards on 0845 051 0845. The more complaints the better, and the stronger and more urgent the case becomes. So if you know of others experiencing the same problem regarding the same agency, it’s best if they complain as best. Build an army.

Ways of preventing this from happening

• The most obvious solution would be to cut out of the middle man. Don’t bother using letting agents, and take control yourself.
• Letting agents offer several packages; they usually offer a package which means the landlord is responsible for collecting rent, while the agent still manages the property. Take that option. Additionally, that’s usually a cheaper option than full-management, where letting agents take full control.
• Get the agent to use an external Tenancy Deposit Scheme (TDS)
• Only use Letting Agents that are registered with An Approved Redress Scheme For Consumer Protection

Has anyone experienced this kind of thing before, or know anyone who has been through this issue?

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Talk / 21 Comments left so far

Suzanne wrote this on 2009-11-30 11:51:30 This is my dilemna. My agent hasn't paid the rent into my account since 14/10. I've checked with the tennant, and she's confirmed that she paid the rent to them 20/10 and 20/11. I've previously told the agent that I want to leave them as I pay them 10% and all they do is take the rent. They've told me that if I leave them, they take the tennant too, as she 'belongs' to them. The tennant's a lovely girl and is very happy in the house and doesn't want to leave.

We've checked the contract, and there's no mention of what happens if the agent fails to pay me, but does say that I can't take out a private arrangement with the tennant for 6 months after leaving them, unless I pay them 6 months rent.

Surely the fact that they've not paid me breaks all of those? 1

Lynne wrote this on 2009-11-30 12:12:34 Hi Suzanna
I've just had an awful time with a rogue letting agent. a tenant gave notice and left - but didn't pay rent for the last 2 weeks, so of course when the deposit came back, part was for the missing rent, but the rest was for damage to the house. The letting agent took commission on all of this. On top of that the house was in such a state - in spite of so-called inspections by the letting agent which I very much doubt were carried out - I've had to have the place dried out because of condensation, had to have bathroom ceiling replastered, a new wooden put in because of condensation rot, total new bathroom, total new kitchen, decorated inside and out, plus so far 2 months lost rent. When I complained to letting agent and said I would not be renewing the agreement with them, they charged me 3 months commission which I managed to get down to 1.5 months commission. On top of that they manage a 2nd property for me, they paid me the rent less the 1.5 months commission from 1st house, and less 3 months commission on this property as 'they' had ended the agreementw with me. So I received less than half the expected commission for that property that month. They also told the tenant I was responsible for all of this, and just left him high and dry. I contacted him and explained it all, and I'm now going to handle it myself with him. A shambles doesn't begin to describe the letting agent.
Can I name them so that others don't get caught? 2

Sam wrote this on 2009-12-02 21:12:42 Suzanna, I believe that this is breach of contract if they have not passed the rent on to you. What does your contract say with regards to when you receive the rent after collection? [it should state how many days] Ask the tenant for proof of payment, ask the agents again for the money. If you get no joy, write them a letter disinstructing them with immediate effect due to non payment of rent. Contact the tenant and give them your details to pay directly to. 3

Sam wrote this on 2009-12-02 21:15:14 I would also say - that today I have posted an entry on my blog about this as I am very concerned about the number of agencies going bust and taking tenant's deposits. PROOF is what you need. Demand it!

http://virtualletz.wordpress.com/

Lynne - why not name and shame. That is wrong! 4

Lynne wrote this on 2009-12-03 10:51:49 Okay - don't go anywhere near Mainway Letting Agents in Thetford, Norfolk. 5

Romeo Victim wrote this on 2010-01-08 19:09:43 This comment has been removed while it is under invesitgation for being libellous...blah blah.
- The Landlord.
13/01/2010 6

Roberta Ward wrote this on 2010-01-12 13:41:04 Guys, these stories are horrendous. If you want legal advice you could try Tessa Sheperson @ Landlordlaw.co.uk. She is very helpful and Im sure could point you in the right direction. You might also try landlordaction.co.uk
If all else fails get in touch with the NALA and report these people who have broken contracts and stolen money from you.

In the meantime, if you suspect your agent of doing this I would go speak to YOUR tenant first and make them aware.I dont believe they have the right to take the tenant with them! How would that work in reality anyway? The tenant may be perfectly happy there.They could only serve them notice- then the tenant is on the 'open market' again.
If you have given proper written notice to quit the agent there is no way they can force you to pay more.
In my experience, most agents on full management do not earn it.Its a waste of money. 7

Claer Barrett wrote this on 2010-01-13 12:01:46 Any landlords who want me to investigate rougue lettings agents in a piece we are running later this year, send me your gripes please: claer.barrett@ft.com I am the associate editor of the Investors Chronicle, and edit the weekly property section. These people deserve to be exposed, and The Landlord should be commended for his public-spririted expose! 8

Roberta Ward wrote this on 2010-01-13 12:11:22 Claer
Whilst I admire you guys for going after the rogue letting agents, this has been tried before with other exposes on certain people. The newspapers involved ( Harlequin spring to mind) had to print an apology so as to be not sued themselves. Unfortunately there seems to be no such thing as freedom of speech in this country.

I wish you luck, hope you get 'em. Landlords have enough to deal with without having to contend with letting agents ripping them off too. 9

Claer Barrett wrote this on 2010-01-13 12:17:08 Well we will certainly have a go!
For the record, we did write about Harlequin Property (the Caribbean holiday homes outfit) at the end of August, in spite of legal posturing, and anyone who wants to read the article can click here:
http://www.investorschronicle.co.uk/Features/Property/article/20090828/0ae3459c-92ea-11de-9aae-0015171400aa/The-risks-of-getting-burnt-abroad.jsp
We hope to run an update very soon - watch this space
CB 10

Roberta Ward wrote this on 2010-01-13 12:21:30 Thats great news. There are a lot of folks who should be exposed for how they have ripped people off. I could easily give you a list of about 10 just of the top of my head. They are still in business and luring in newbie investors too. Makes me so mad.
Just as an aside, does anyone know if Harlequin have followed though with any legal threats?
Roberta
Thanks for the link! I mat post it around a few places ;-) 11

romeo victim 2 wrote this on 2010-01-15 14:58:55 hi romeo victim, i am an lanlord as well as their victiom.is there any way you could give us more info about the investigation. we haven't contacted the tradig standards yet. what is the best thing to do? 12

RomeoVictim wrote this on 2010-01-16 18:10:31 If a takedown request has been received on behalf of Romeo Bater Limited, formerly of 507 Old York Road, Wandsworth, SW18 with a prior service address of Foresbrook, Luton this notice will be able to remain published in this thread as it is a statement of fact.

Statements of fact are, of course, not libellous.

As moderator of this site or indeed a former client or creditor of Letting Agent RomeoBater Limited, please consult Companies House and / or speak with DS Doyle at Wandsworth Police.

-- 27/01/2010 - this comment has been modifed by the admin. 13

RomeoVictim wrote this on 2010-01-16 18:33:51 Hello Romeo Victim 2

Please contact Wandsworth Police and email romeobaterinfo@hmamail.com

As the 507 Old York Road address is abandoned, you may wish to use the last good known address for service for Mr Richard James Davies: Forsebrook Butterfield Gn Rd, Luton, LU2 8DD. This property is owned by Mr Richard Morgan Davies, his father.

The address previously given for a property in Cornwall (possibly a holiday home?) has possibly been sold by the Davies Family.

Please post to this site if you have been affected and email romeobaterinfo@hmamail.com with your
details.

– 27/01/2010 – this comment has been modifed by the admin. 14

Richard James Davies wrote this on 2010-01-17 15:50:34 My name is Richard James Davies.

I was the sole director at Romeo Bater. With regards to the monies lost due to Romeo Bater ceasing trading, I can only apologise. If I had money I would return it to you all today, but I don't even have the £2,000 required to liquidate the company.

I have no assets, no home and no car. Basil Hawkins has never traded and has never earnt a penny.

For the record, Charlotte Pickering and Gemma Coles had absolutely no knowledge or involvement in the demise of my company. Gemma and I are no longer together due to these circumstances and the least I owe her and my sister is to clear their names. Also my Father, Richard Morgan Davies had absolutely no knowledge of the financial straights that my company was in when I asked him to become a director and invest money into the company to open a second office.

I worked as hard as humanly possible to keep the company going to earn enough money to pay everyone back but the hole I was in was too deep. Again, I can only apologise to you all and assure you that there is no money. If I had any I would attempt to make repayments but my career and life is in tatters.

If anyone wants to contact me then they can on my email address which is LIITEA@HOTMAIL.CO.UK

Richard 15

Richard Morgan Davies wrote this on 2010-01-17 19:03:29 It has just come to my attention that people are commenting on Romeo Bater on this site.I have always been contactable over this matter and have spoken to many creditors.
I was a large investor in this company and have lost all of that money.
Every body involved worked as hard as they could to keep things going, the fact that I lost my entire lifes savings proves that we took this very very seriously.The office rent and wage bills were just too big to sustain and the company went under.
My e mail is richard.davies777@hotmail.co.uk 16

Paul wrote this on 2010-04-27 12:41:12 I have a large portfolio and deal with various agent - the above named agent ,mainway in Norfolk deal and manage 11 properties for me as i work abroad.
I must say they have gone out there way for me on quiet a few occasions dealing with issues as they happen and also re-letting very quickly i really cant fault them as i also deal with agents in other parts of the uk who really are/were useless and charge for everything!
However reading above they did not actually withhold anything rent or deposits? I find they are very quick at passing my rent on to me however I also do not expect a letting agent to be a structual engineer just a letting agent so i dont expect a structual report on the property just an update on the tenancy - but thats buisiness! 17

Ian wrote this on 2010-05-06 15:43:20 I am owed 3 months rent. It was remis of me not to be more careful when checking my bank statements. I live in Australia, my property is in Westminster London. I have tried to contact the lettings agent Cosmos Estates. Got no answer to my email and the phone company informs me that the three phone numbers I have for them have all been disconnected. I have sent another email today advising Cosmos that I am dis instructing them and I have appointed another agent. What can I do, if anything to get m money. If there are still tenants in the property I am also worried that I will be liable for their deposit, even though it was never passed on to me. Do I call the met police, the trading standards office or what? I am at a complete loss. 18

Sam wrote this on 2010-05-06 17:15:09 You need to immediately inform the tenants of the situation. You need to get a record of any payments for rent they have paid and any deposit. If you have not been passed this deposit (or the agent was meant to lodge and you cannot find any record of it), then you are still liable. You need to get the funds (from your own pocket) and then lodge this deposit immediately into an appropriate scheme. if you do not do this the tenant can sue you for 3X the amount and you cannot serve a S21 if you ever want them out.

How have you chosen the new agents? You must be very careful with who you choose. Have you informed them of the situation? What have they suggested? You need to contact trading standards, the police, companies house and you will need to instruct a solicitor/ go through small claims if you wish to reclaim the monies. That is only my opinion. 19

Raj Rangoo wrote this on 2010-07-25 09:56:17 We are having an aweful time with our Letting Agent In Yorkshire which is sressing us big style. Initially, we thought that he was a very professional person the way he spoke and reassured us of how he manages the properties, but that was proven to be wrong. He did not pay us 4 months rents, claiming that the tennants were not paying as they were not very happy about something. He failed to evict the tennants in time that he was instructed by us. He has never provided us with a contract despite numerous remindings by e-mails, phone calls and text messages. He did not pay us even from the bonds that he normally keeps. He promissed us that he would be able to locate them and recover the money through small claims which I understand he possibly never persued with that.
He managed to find us another tennants straight away after the first tennants left and every was going on fine until we requested him to give the tennants 2 months notice as we are selling the property and again he failed to do that. The tennants are still in the property, but the letting agent has not been paying us promptly since then. He now owes us 3 months worth rents. We are fed up calling him, e-mailing and leaving text messages but he hardly replies. I personally contacted the tennants and they told me that they have received the notice letter in June from the Letting agent, when in fact they should have vacate the property in May according to our instruction to the Letting agent. The tennants also stated that they have never failed to pay their rent, but we do not understand why we are not paid promptly. We keep requesting him for a copy of the contract and a copy of the notice letter, he issued the current tennants to vacate the property, but he keeps ignoring us. We have tried to get advice from CAB which was of little benefit. I saw a Solicitor for advice but she was quite negative about things. I am going to contact the Trading Standards during the week for advice regarding how and where to put a complain about my letting agent's fraudulent activities.
Anybody who had been in simillar situation or anyone who could advise us on how to deal with this situation would be appreciated. 20

dankor wrote this on 2010-08-04 20:11:51 best thing to do is only use a good estate/letting agent that has a good record. Ask for reference from existing landlords! 21

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