Rent2Rent Scheme Gone Wrong

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12:24 PM, 20th April 2013, About 12 years ago 70

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Rent2Rent Scheme Gone Wrong I rented my property to a company who in turn sub-let the property for the same term. The tenancy was an AST in the company name and I retained a deposit that was not insured.

The company provided me via email a tenancy agreement and I introduced additional clauses to accommodate sub-letting but apart from that I accepted the agreement they provided. I met the director of the company, initially he was going to find me tenants but after only one viewing and no offers he suggested that I rent the property to his company and my rent would be guaranteed. All my dealings were with him, he said he would find tenants for my property and my rent would be guaranteed. I accepted three months copies of his company bank statements as proof of income. I was going to live abroad and hoped to rent the property for at least two years, however unforeseen circumstances brought me back to London and I gave notice requiring possession of the property at the end of the initial term of one year.

During the year several issues arose. The rent was always late. I emailed and called from abroad, it was paid but always late and on four occasions later than five days. The lease allowed for a £25 charge and interest for rent over five days late. Secondly, he reported that the oven wasn’t working and the kitchen sink was blocked and leaking. He said he would deal with it and deducted £200 from the rent. I requested an invoice on several occasions but never received anything.

On my return to London, the property was not handed back at the end of the tenancy. It was three days later that I got the property back. That morning when I attended the property I found the locks changed and the tenants still in bed with all their personal effects still in the house, food in cupboards etc. they said they were waiting for the van and the keys to their new place being provided by the company. I left to return later that day, they had just started loading a van and some three hours or so (and three days later) I eventually entered the property with a representative of the ‘company’ to deal with a checkout.

The property wasn’t clean, the fridge/freezer was frozen over, oven dirty, floors, skirting boards dirty, kitchen cupboards dirty (they just emptied the cupboards and left), bathrooms were dirty, guest cloakroom etc. Furniture was left in the wrong rooms and on different levels, the locks had been changed back which was good but windows were dirty, the back garden was reasonable but the front garden was an overgrown mess.

I wanted to deduct stoppages for the cleaning but the representative for the company didn’t agree, I had the deposit in full in cash and said we should resolve the cleaning issue now but she refused and left the property without signing the inventory out. I organised professional cleaners and two days later they attended and during their cleaning discovered the oven was not working and the sink was leaking and blocked, as they had not been repaired!! I organised an oven repair for £140 to discover the oven was beyond repair so I purchased and fitted a new oven. I organised the clearance and repair of the sink and I cleared the front garden.

Three weeks later as I hadn’t heard from the company I wrote sending copy invoices and deducted the cleaning costs, the cost of unblocking the sink but not the repair. I deducted £200 for the repairs I had been charged for but had not been done, I deducted £25 for each late payment, the initial checkout fee and a fee for returning later that day to deal with the inventory checkout again and finally I deducted two days additional rent for vacating late. All these are covered within the terms of the agreement bar £200 deducted from my rent for repairs not done, however without an invoice. I have proof the works were not done this was justified. I sent a cheque for approx £400 left from the deposit following the deductions and requested to meet and discuss if the company had any queries etc. The cheque was cashed and about six weeks later I received a letter saying they would take me to court for not insuring the deposit and that I should pay them all the deposit back. I refused, again suggesting we meet and received a letter demanding £500 back on top of the £400 already paid or he would take me to court!! I wrote again and said I was happy to meet to resolve the matter because I could not see how the company was coming to their figures? I finally received a letter stating they do not have time for this but would take me to court and I would have to pay four times the deposit in compensation.

That’s exactly where we are. They applied to the small claims court, I have appealed and am now waiting for a court date.

I believe the tenancy should have been a company let? That it does not require the deposit to be insured and therefore the only question is the cost of legitimate costs for damages, cleaning etc from the deposit. However I know the Judge will decide the type of tenancy but I’m wondering if there is any other case I can rely on to support my case?

I felt I had to follow through with this issue as the ‘company’ can claim 3 times the deposit up to six years after the termination of the tenancy even if I handed back the full deposit. I believed I did everything right but was guided by this man who operates an agency sub-letting properties for owners living abroad. The claim to the court was filed in the man’s name not the company name as stated on the tenancy agreement. My question is if a property is let to a named company, even if the tenancy states it is an AST, is it a company let?

Do you know of any similar case where the ruling had fallen in favour of the defendant in respect of an AST being a company let and falling outside the deposit protection scheme?

Any help would be gratefully appreciated.

Marie

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Tags: Advice requested by readers, Deposit Protection, discussion, Forum, Landlords, Leak, Leaking, Property, questions, readers question, Readers Questions, Tenancy, tenants

Comments

21:11 PM, 2nd July 2013, About 12 years ago

No one like court cases hanging over them so well done indeed!
Times like this its a shame you can't name and shame Mark to stop this person doing it again :-/

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Marie Smyth

21:56 PM, 2nd July 2013, About 12 years ago

Francis

I would love to name and shame but I think I would be facing another court case?

Marie

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Mark Alexander - Founder of Property118

22:05 PM, 2nd July 2013, About 12 years ago

Regarding our policy on name and shame please see >>> http://www.property118.com/what-property118-is-not/

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Mark Alexander - Founder of Property118

12:40 PM, 3rd July 2013, About 12 years ago

The Sunday Times are very interested in covering this story and are prepared to name an shame in terms of Marie's Court Case. I have had a long telephone conversation with Marie this morning and she is agreeable to going public to expose the dangers of Rent2Rent. Watch this space for a video which Marie and Vanessa Warwick will record at some point and also look out for the article in The Sunday Times.

The Sinday Times reporter would also like to hear from others who have experiences with Rent2Rent, positive and negative. The journalist covering the story is:-

Robin Henry - News Reporter
The Sunday Times
0207 782 7620
robin.henry@sunday-times.co.uk

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13:18 PM, 3rd July 2013, About 12 years ago

Hi Marie,

Congratulations to you for a successful outcome.

Kind regards,
Ed

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21:37 PM, 4th July 2013, About 12 years ago

Well done indeed. Reminds me of me challenging an administrator in the High Court although the hearing went from the scheduled 15mins to 1.2 hours I lost my application down to not understanding what I could of asked.
As to your costs I think that you could of reasonably said you would like to make a donation to the professional landlords who helped you and gave advice and also for your time inpreparation of say £1000.
In the case I was involved in I should of said being jumped with documents 1.5 inches on the day, 2 inches on the Friday 5pm the final business day before the trial.
Interestingly I should of realised I was asked "if I had new evidence?" and if so the judge would of postponed the trial. I said it was all here but it needed to be new!
I could also of cross examined the barrister as I overheard them talking about what if they were dismissed as administrators in the minutes before we went in. Why ever would they say that if there wer not good grounds!!!?
They did not know that I was hiding listening around the corner. It was quite intimidating they had for what they hoped was a none attendance of me (they timed it for 3 days into my honeymoon) and very brief court appearance for £1.3mil in outstanding fees a Barrister £1k/hr Law partner £650/hr, Administrator £600/hr plus two further solicitors behind me. A total of 5. Sadly I didn't get it postponed due to inexperience (I could of asked them for their emails) and I may of been able to lessen a travesty of justice and likely commercial fraud by a large bank, large accountants and city law firm oiling the wheels.
Interesting hearing your court experience Thank you and well done again

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Marie Smyth

23:46 PM, 4th July 2013, About 12 years ago

Again a big Thank You to everyone for all the congratulations received regarding the outcome of 'my' court case. To Vanessa I posted an abreviated account on Property Tribes and tried to link it to property118 but it wouldn't allow the link? Perhaps you would be kind enough and able to provide the link? I must admit I didn't relish the idea of posting the whole story again; my apologies for being lazy on this ocassion! Very exciting times regarding the case being reported in The Sunday Times, I am very happy to report the outcome but have some trepidation in respect of a picture of myself or my home as this 'gentleman' knows where I live and I certainly wouldn't want my picture available, just in case? I'm not suggesting that anything would happen, just that currently I'm not comfortable with having that aspect of the case being made public. A final HUGE Thank you to Mark and Vanessa it is because they have been involved that the matter is being reported in the media; without these invaluable sites ( Property118 and Property Tribes ) I'm sure many, many Landlords would be struggling in the dark at the moment given the conflicting and onerous decisions that have been made regarding tenancy deposits.

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7:00 AM, 5th July 2013, About 12 years ago

What is the proper lease agreement for a company called please, and what happened if we do an ordinary AST with a section 21? Is it all still valid?

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Mark Alexander - Founder of Property118

7:52 AM, 5th July 2013, About 12 years ago

@T Juna - that is a VERY good question. In truth I don't know, but I know a lady who is likely to know. Her name is Tessa Shepperson, a Landlord and Tenancy solicitor who runs a firm called Landlord Law. I have email Tessa this morning to give her the "heads up" about your question and to ask her to write an article about this. The Rent2Rent scheme is already hitting the media headlines and that will intensify further after this weekend. I suppose if people are going to get involved in Rent2Rent they might as well do it right!

Tessa has written quite a few articles about Tenancy Agreements here recently, please see >>> http://www.property118.com/author/tessa-shepperson/

My hope is that Tessa will see your question and the current state of the market as an opportunity to create a Law Pack for Rent2rent Landlords.

Just as a matter of interest, how much would you pay for a pack which included legal advice on the proper agreements to use, the pro's and cons of the various choices and tenancy agreement templates?

Given that so many people are getting into the Rent2Rent market I'm sure demand exists for this but will it be worth somebody like Tessa investing her time into creating the legal documentation needed? That why I am asking you to consider the value. The figure I have in my head if £250. Will people pay that or should the figure be more or less do you think?

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8:31 AM, 5th July 2013, About 12 years ago

Hi Mark, everyone is struggling right now, even going to court and representing themselves, which I did recently in an eviction case and won. If we cannot afford solicitors fees it is unlikely we would pay that price for a legal pack. As a suggestion, you could break it down and either pay full price for the whole pack, say £175 or pay separately for each part. I subscribe to a Tax information company and they offer one question to be answered for £60 by email, so you could add that too. Hope that helps.

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