My daughter is the victim of a fraudulent letting agent – Help please

As has previously been stated the tenants unfortunately have no means of proving that fake agent#2 had the legal right to enter into a contract with them in the form of an AST. Equally the LL can't prove they didn't. In fact the implication by the early actions of FA #2 is that they did have a contract with FA #1 (provision of furniture & wifi). This creates a problem for LL in claiming that a tenancy doesn't exist because that is unclear & neither party can show proof either way.

A second issue which is the likely reason that the landlord has refused to work with the existing occupants is that it sounds as though this may in fact have created an unlicensed HMO. I'm no expert in this area as I don't have any HMOs myself. But if the LL is not licensed & the property itself is non-compliant this could be a massive headache for the LL and take her into a business area she isn't up to speed on and doesn't want to be in with all the legal obligations that involves.

I have invited two more legal minds to comment - Giles Peaker @NearlyLegal and Charles King at Cotswold Barristers.

@NearlyLegal - would you comment on this please? https://t.co/r6FK2rY5NQ

— Mark Alexander (@iAmALandlord) November 9, 2016

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Reply to the comment left by "Kate Mellor" at "09/11/2016 - 11:03":

Good point on the unlicensed HMO angle.

A property with three or more stories AND five or more tenants ALWAYS requires an HMO licence, regardless of where in the UK it is.

That would explain why the landlords wants to get the tenants out. The hassle and expense associated with HMO licensing is probably not something he wants to get into. It will also affect his insurance premiums and wear and tear. The landlords insurance may even be invalidated!
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That is why i asked if it was three stories on page one Mark...... There is no rental liability on an unlicensed HMO and no ability to serve a section 21. That is why i suggested the tenants contacted the tenant liaison officer..... A good one will not only pursue the LL for rent paid (whether or not received) but will also assist with claiming back 3 X deposit held and ensure they are not harassed.

I'm sure you and your daughter have the sympathy of everyone who reads this site. I believe that an answer to the problem may lie in your comment that:

“The landlord says that the letting agent she has an agreement with (which is also bogus) has sublet to another letting agent (the one my daughter has an agreement with ) without her permission!”

So, the landlord has now told you that she delegated the power to grant of a tenancy to a (“bogus”) agent who has in turn delegated the power to another. Presumably the landlord handed over the keys (i.e., they weren't stolen from her) to agent no.1, and the landlord would accept that she would have been bound by the tenancy agreement if it had been arranged by agent no.1, notwithstanding that that agent was “bogus”. I presume “bogus” means that that person wasn't really in business as a letting agent. We all know, however, that no special qualifications are required to let property as an agent – certainly none which could invalidate a tenancy granted by an agent in these circumstances. There is a legal argument that your daughter could be taken to have known that the second agent was not empowered to grant a tenancy – did not have 'apparent' or 'ostensible authority' to enter into a contract, but that would be a very difficult argument to run, and the landlord would be brave or foolhardy to try it in court. Obviously the landlord intended the property to be let by an agent – who knows whether she had a written agreement with that agent forbidding further delegation. The reality is, it's not your daughter's problem.

There are undoubtedly some technical legal issues which could potentially arise in this case and which could only be resolved by the Supreme Court (!) They include: whether your daughter is a 'bona fide purchaser for value without notice' (which she probably is) and what effect that has; whether the agent had authority to give a valid receipt (which they probably did); the liability of an undisclosed principal, and whether payments of rent to an undisclosed agent discharge a debt to an undisclosed principal. That's all before we get to deposit protection issues. These are all very interesting questions, and I'm not surprised that her solicitors have started to take a more conciliatory tone! It's a landlord's nightmare. The landlord should start taking your daughter's rent straight away and should negotiate a new tenancy agreement. Your daughter should ensure that she repeats her offer to pay the rent in writing, by letter and e-mail directly to the landlord. Then at the very least she can make a 'defence of tender' to any rent arrears claim (i.e., a defence that she offered the money but the landlord refused to accept it). It is usually standard advice to tell someone in these circumstances to keep any unpaid rent in a separate account, but that's up to your daughter.

As some very experienced people have said on this site, someone has to take your daughter to court to get her out. If it's the owner she will have to explain to a judge why her name is not on the tenancy agreement, and how she is not bound by the tenancy which was apparently entered into by her agent, or her agent's agent. Gary's comment (to paraphrase) that the problem is worse for the landlord than the tenant is right.

Your daughter should not feel bullied into leaving her home when it is her landlord who has made the mistake. If your daughter keeps her nerve and stays put, or defends a possession claim brought by the landlord, she takes a risk, but there is a strong likelihood that the landlord will shy away from a costly and uncertain legal battle against someone who is perfectly willing to pay rent. Your daughter will not have a CCJ against her even if the landlord wins any case they bring, so long as she pays any sums ordered by the court within 28 days of the judgment. But I myself would be reasonably confident that that would not happen. In short, I don't think she's in as bad a position as at first might seem to be the case. If she's on a low income she should seek the advice of a legal aid housing lawyer who will be able to advise her for free if, and as soon as, the landlord's solicitor has purported to require her to leave the property.

Mark A is right that an offence has almost certainly been committed, and that, if you can find them, a private prosecution against the perpetrator can sometimes lead to a remarkable recovery of money which would otherwise have been written off. I hope this helps a bit, and I do wish you every success.

Reply to the comment left by "Romain Garcin" at "09/11/2016 - 10:55":

Romain, you say that you think they have a valid tenancy.

I know the law tries (but often fails) to follow natural justice, but are you saying that if I walk into an unlocked empty house and conjure up a tenancy agreement agreed with someone I can't prove has any connection to the owner, that that is a valid tenancy? I would have thought that scammers would have a field day with that one!

That these tenants did not intend to be in this situation I'm sure would bring leniency and sympathy in the legal system, but I can't see how it would make a bogus tenancy into a valid one.

In reference to Mark's comment on my use of the word "squatters", I know the word is pejorative, but I think technically they are squatters, albeit unintentionally. Dictionary.com gives a squatter as "a person who settles on land or occupies property without title, right, or payment of rent", which appears applicable to me.

I also said that the financial loss would probably end up with the LL. Though this may be true for the rent lost, or any costs to sort this out, I suspect that the tenants will have to write off the lost deposit.

If the tenants are technically squatters, I don't see how the LL can be held responsible for conforming to HMO regulations.

Protection From Eviction Act 1977:

"(1)In this section “residential occupier”, in relation to any premises, means a person occupying the premises as a residence, whether under a contract or by virtue of any enactment or rule of law giving him the right to remain in occupation or restricting the right of any other person to recover possession of the premises"

Whoops!

Reply to the comment left by "John Frith" at "09/11/2016 - 13:56":

Yes John, if you walk into an empty property which does not belong to you and grant a tenancy of it to someone else you have granted a valid tenancy. Surprised? Well it's only valid as between you and your tenant. The law, only adjudicating between competing rather than absolute titles to land, will not interfere until someone with better prexisting title comes along. And yes, of course, that will include the 'real' owner to whom the court will (eventually) grant possession if the owner seeks it. But the problem in this case is whether the landlord can show that the 2nd agent did not have power to grant a tenancy under whatever arrangement she reached with the 1st agent. I believe a court might well find that some form of authority was given. But that is to pre-judge the case without seeing any evidence. Something none of us should ever do....!

Reply to the comment left by "Gary Nock" at "09/11/2016 - 14:01":

I'm unclear what point you are trying to make.

I'm not aware of anyone claiming that the tenants couldn't be evicted eventually, "residential occupier" or not (which for that piece of legislation it appears they are not).

Reply to the comment left by "Charles King - Barrister-At-Law" at "09/11/2016 - 14:15":

Thanks Charles. I stand corrected.