My letting agent delays on transferring rent to me every month!

Hi Sunny,

This is not a good sign and normally an indication of cashflow issues.

Does the Agent have client money protection insurance and part of a Redress Scheme?

If it is arguable that the agent is breaking the terms of their contract then it is difficult for them to hold you to theirs. What does it say in the agent's contract about payment timescales?

Reply to the comment left by "Neil Patterson" at "26/01/2017 - 14:08":

Hi Neil,

I will have to refer to the contract in regards to protection schemes and also payment timescales. Will update hopefully tomorrow.

Thanks
Sunny

Sounds scary. You're at risk of two people letting you down ... tenant and agent!

I have had this situation twice and both times the agent did a runner/went into liquidation with my money. If possible I would go to the office asap and try and demand the money there and then. I would also be finding a legal way to sack the agent and get the next rent payment direct from the tenants - if not they are likely to keep the next month's rent as well, if they are planning on doing a runner. Someone else would have to advise on the legality of this - but this should be your aim.

Hi Sunny
I am the MD of Go Direct Lettings a growing national franchise rental agency, this is really annoying and bad news to me as our industry is already up against it with agents like this causing us all this bad rap!
However, to offer some positive advise, before we shoot to kill, you must go and speak with the agent and find out the Why? Then if happy insist on at least a standing order being put in place there and then. This is of course a second chance, or sounds maybe more like a third.. If you are not happy with the response, then you have every legal right to stop payment going to the agent. Write a letter to your tenant instructing them to stop any further payment to the agent and make arrangements to collect direct to you, and if they are on UVC or HB, inform the LA.. This doesn't circumvent the agreement you have with the agent, that can be dealt with separately,but as said above it would seem they are in breach anyway, but it stops the rot and has the money redirected. Then you can deal with the agent later and select another. When selecting the next agent, always make sure they are a member of 'Safe Agent' have client money protection are a member of DPS and PRS. if you have any doubt about any of the abbreviations, Google them, it will assist in your development as a Landlord. If I can assist further I can be found here, via my members profile. Good Luck. Don Holmes.

Dear Sunny

I am sorry to hear of your situation. It is cases like this which lead to the industry having a bad name and the Government looking to bolster regulations.

There should be no good reason why an agent cannot promptly pay over rent which has been collected. It is fundamental (although sadly not legal) that an agent keeps rents separate from office monies. Any agent must be able to account to their client without delay. Therefore you should not accept excuses from the agent, assuming the rent has actually been paid by the tenant.

If the tenant has not been paid then a decent agent will be informing you of what is going on and will advise on appropriate steps required to rectify matters.

I agree with the advice to go and see the agent without delay and find out just what is going on but, after thirty years in the business, I have heard every excuse under the sun when really there should be no excuse. My business's clients account manager (of 11 years service) passed away suddenly at Christmas but we have still made sure all our clients are paid out properly; it has been hard work and very challenging but we are not prepared to let clients down. We know they need money for tax (at this time of year), mortgage payments, etc. and I could not sanction delays with money.

I sense a change of agent on the cards.

Good luck

Graham

Dear Sunny, my advice would be not to ignore the warning signs. You need to reassure yourself of where you stand by checking the following:-

1) If you don't know which deposit scheme your agent uses and you haven't been given proof that your tenant's deposit is protected use this website to check that it is indeed protected: https://england.shelter.org.uk/housing_advice/tenancy_deposits/check_if_your_tenancy_deposit_is_protected

2) Find out immediately if your agent has a separate Client account and client money protection insurance and request a copy of their current certificate to be emailed to you ASAP, or go in and see it. If they tell you it's held at head office then ring head office and ask them to email you a copy. Do not be fobbed off with verbal assurances. If you are given the bank details for the client account confirm with your tenants that this is the account they are paying their rent into.

3) If any of the above does not stack up then immediately contact your tenant in writing and instruct them to make any further rent payments directly into your own account.

Do not take the agents word for ANYTHING. Establish the truth of what you are being told with PROOF. Many landlords have been fobbed off with promises and tall tales for many months before they finally realise they've been had and have been propping up the agents cash-flow. At least once you have the proof, which any reputable agent will be more than happy to supply you with, you can at least rest assured that your interests and your tenants interests are protected.

Thank you all for your responses and comments. Very reassuring to hear them - thanks.
Unfortunately his offices are also closed for the last two weeks now, as apparently his assistant has quit.
Luckily, I'm booked in to see the tenants tomorrow and hopefully gain any further insight into previous transactions to the agent if I can.
I will try to perhaps verbally mention to cease further payments to agent or do you recommend this should only be done in writing?
Also, have not managed to find the contract at this time which is proving to be a real headache.
Is there any other comments I can make to tenants without overstepping the boundary??

Thanks
Sunny.

Reply to the comment left by "Sunny Singh" at "27/01/2017 - 13:49":

They're your tenants and their contract is with you, not the agent.

Just be honest with them regarding your concerns and tell them not to make any further payments to the agent. All rent should be paid directly to you. Tell them in person by all means and then confirm this along with your bank details in an email. Then you will have a record of what you agreed and what the bank details were that you gave them in case of errors or misunderstandings.

If the agent turns out to be above board and you owe them any fees, then you can pay these yourself.

Many thanks all. I really appreciate all your comments and you guys have helped me a great deal.

So took your advise and wrote the tenants a letter advising them to cease any further transactions to the Agent and Direct Debit to me directly. Thankfully the tenants were very understanding when I spoke to them Saturday just gone and they signed it without any issues. In fact they also had some issues with the agent as well...

Anyway, waiting now intrepidly for the agent to contact ME for a change 🙂 Still no rent for Jan paid to me yet..

From the tenants point of view, they DD direct into agents account on the due rent date every month, so I find it very hard to understand why Agent is delaying into transferring to me.. But seemingly after reading your comments, its looks very likely that he has possibly cash flow problems.

I've got a feeleing that this may now be resolved very soon...
Cheers, Sunny