Bankrupt estate agent – London W11

Bankrupt estate agent – London W11

16:39 PM, 18th June 2015, About 10 years ago 20

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Hello

We are expats currently living in Australia and use an estate agent in London W11 to property manage our BTL portfolio and collect the rent. Last week said Agent was declared bankrupt by HMRC. Bankrupt estate agent - London W11

What is my position re. the rent now due by tenants – can I have them pay it direct to my UK bank account or am I bound by the lease and/or UK law for them to continue to pay it through the bankrupt Agent’s account? If they do this I believe it will be held by the Tax Man for months while the affairs of the agent are reviewed. The Agent is no longer managing the flats and I am required to employ someone else to look after the tenants. I require the rent for mortgages.

I’d welcome all advice as although I’ve been a landlord for 20+ years Ive never experienced this before.

Many thanks.

Amelia


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Mark Alexander - Founder of Property118

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10:26 AM, 19th June 2015, About 10 years ago

Reply to the comment left by "Alan Loughlin" at "19/06/2015 - 10:21":

Hi Alan

It might work for you but for most people it doesn't.

Why do you think I use an agent despite having over quarter of a century of experience?

My time is worth more than I pay my agent, and besides, if they screw up I can claim against their PI policy. If I screw up then any losses are entirely down to me.
.

Alan Loughlin

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10:49 AM, 19th June 2015, About 10 years ago

my experience is that they charge a lot and do nothing much, and then if there is a problem they refer it back anyway, might just as well do it yourself in the first place, like the saying goes, if you want a job doing properly etc.

Charles Fonteijn

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10:56 AM, 19th June 2015, About 10 years ago

Please be aware that your tenants might be required to deduct tax and pay direct to inland revenue if there is no agent involved. You should get some advice about this.
You might want to consider setting up a UK company.
The below link might help.
https://www.gov.uk/paying-tax-on-rent-to-landlords-abroad

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11:10 AM, 19th June 2015, About 10 years ago

Hi - to have the tenant pay the HMRC direct is not a good way. There is certain criteria to be looked at and I would assume that as the Landlords are in Oz the appropriate paperwork has been dealt with already as overseas Landlords, if not there are ways to deal with it.

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11:44 AM, 20th June 2015, About 10 years ago

Amelia,

My comments on your situation are below. I don't want to appear like a sweeping vulture but I would be happy to talk to you about looking after your property affairs for you. I currently look after rental properties for 3 landlords abroad - one in NZ, one in Portugal and one just leaving for Japan. All of whom would have a chat with you if required. From reading the discussion above it seems you need a 'man on the ground' and to just get back on track. Self management might work for some but working with a good agent has its merits. Take a look at my profile and my website, give me a call for a chat and if you feel that I am worthy I can resolve this without further delay. Notting Hill/Ladbroke Grove/Shepherds Bush are a stones throw from me.

I would also add...

1) Rent Payments - As you know, the AST is a contract between you and your tenant, regardless of who signed it (i.e. an Agent on behalf) and therefore you the Landlord instructs the tenant on how to pay the rent (i.e. to your own account or your nominated agent). This can be done in a formal manner.

2) Contacting tenants - If you have the contact details for all of your tenants then a phone call and an email from you to each with an explanation and new instructions. If it were me managing on your behalf I would follow that up with a phone call and a visit in person to each of your properties by appointment - introductions, ensure tenant is happy with landlord, property, new agent etc etc. ease any uncertainties, face to face - always a good way to start a relationship.

3) Don't have tenant contact details/Tenant not responding? - As your nominated agent I would ensure contact was made with your tenants, visiting the property if necessary, armed with the required paperwork and good manners to ensure tenant satisfaction.

4) Domus Nova - Are they maintaining contact with you, being cooperative? Possibly not. Retrieve as much of the paperwork on your file as possible. Anything important that's missing can be dealt with.

5) Deposit monies - deal with each case. Sounds like that is in hand. Hopefully all are with DPS or similar.

6) Any outstanding funds/float - pursue as with any other bankruptcy. Bottom line, this figure will be your worse case scenario re losses.

7) Sorting the HMRC obligations is a very straight forward affair. We report to you monthly and HMRC quarterly.

8) Once sorted, enjoy many more years of hassle free investments ...:)

Even if you don't contact me I wish you well in resolving without too much loss.

Regards,
Martin.

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11:53 AM, 20th June 2015, About 10 years ago

Forgive me Mark, I hope you don't mind me coming back in here...

Amelia, My Members profile doesn't currently link to my business details. I have just submitted these via the profile update. I have been a reasonably frequent reader of P118 since it's inception and occasional poster. I can be found by Googling 'Martin Wheeler Property'.

Mark Alexander - Founder of Property118

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12:54 PM, 20th June 2015, About 10 years ago

Reply to the comment left by "Martin Wheeler" at "20/06/2015 - 11:53":

Hi Martin

Your contact details are not showing on your member profile because you have not paid to be upgraded.
.

Puzzler

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14:16 PM, 20th June 2015, About 10 years ago

Alan, I agree with Mark, there are some very good agents. Just because you made a bad choice does not give leave to "tar all with the same brush".

GWFord

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19:01 PM, 20th June 2015, About 10 years ago

I am sorry to hear about your misfortune. Fingers crossed, touch wood any any other lucky routine I can think of, I've never had this misfortune (so far).

I did have a question, if anyone knows the answer I'd be grateful.

My question, wouldn't it be possible to make a claim with their Professional Indemnity insurer. My thinking is, IF the managing agent failed to perform their duties as agent (inform their clients of their bankruptcy, remit client account money to the landlord, make some attempt to inform their clients what actions would/ would not happen in respect of each managed property, surely they are in breech of their managing agent contract and IF as a consequence the Landlord is now obliged to incur expenses trying to resolve matters between him and his agent and also with this tenant, is this not what PI insurance is for?

I might be wrong. Either way clarification would be appreciated.

amelia ward

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5:11 AM, 22nd June 2015, About 10 years ago

Hello all.
Over the weekend I received a voicemail from Domus saying they had resolved all issues with HMRC and they are again trading. The details of how they did this they did not say. But Im surprised.
Ive taken everyone's thoughts and advise on board and its been invaluable this last week as we decide what to do next so thanks everyone for this. We've made a few decisions putting our flats 1st and once Ive spoken directly to Domus I'll be able to put them into action. Its all about our survival [sadly] and each member of their Lettings + Property Management team will be thinking the same as well as every one of their clients right now.
All the best

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