Bought a property with tenants in situ

by Readers Question

10:49 AM, 2nd December 2015
About 3 years ago

Bought a property with tenants in situ

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Bought a property with tenants in situ

I just bought a property with tenants in situ. Previous owner has been using a letting agent who introduced the tenant, used its tenancy agreement template, and subsequently managed the property. Deposit is held by them on TDS. There are some on going issues on the property relate to condensation. Tenant has been paying regularly as we have seen the proof of payment since they moved in December 2014.bought

Unfortunately, I had some issues with this agent in the past and I prefer not to use them. However, as they have been managing this and working with tenant for a year now, I might end up continuing with them. any suggestions?

Meanwhile, I use my deposit, and agent is not sure about the process of releasing the deposit from TDS to me, so I can register with my deposit. Does anybody know a proper process to do it ?

Do they need tenant’s approval to release the money ?

Ozgur



Comments

Pam Thompson

13:22 PM, 2nd December 2015
About 3 years ago

If you are not planning to continue with the letting agent, I would have thought you need to lodge the deposit with TDS as you don't currently have a contract with the letting agent. If it remains with the agent, they would be responsible for dealing with any claims against the tenant deposit on check out and that would mean them doing the check out. We bought a tenanted property but insisted on starting again with a new agreement to avoid these sort of complications. If the letting agent don't know how to deal with this, i would recommend you don't continue with them as it must be very comm on situation. Sounds a little like they are trying to get your business!

Steve From Leicester

14:55 PM, 2nd December 2015
About 3 years ago

Your agent had a contract with the previous owner. You don't and its entirely up to you whether you choose to use them or not.

I'm an agent and we're in this situation occasionally. We should get the tenants agreement before doing anything with the deposit as they paid it to us in the first place. But we'll do all we reasonably can to persuade them to agree because we don't want to be holding a deposit on a property we don't manage.

I'd wonder about the motives of an agent who, in these circumstances was reluctant to let go of a deposit, particularly one not held in a custodial scheme.

Alison King

22:39 PM, 2nd December 2015
About 3 years ago

I'm surprised this was not sorted out by your solicitor. I would have expected the deposit to transfer to you so you could protect it on completion and for it to have been included as an item in your completion statement so it was all documented and above board. That's how it was handled for me. I'd be inclined to get back to your solicitor and ask why it was overlooked.

Bournemouth Runner

0:09 AM, 6th December 2015
About 3 years ago

I had a similar situation recently. The agent couldn't release the deposit to me to protect (and shouldn't to you), as it's the Tenant's money, not mine. If I'd have agreed to use the same protection scheme, the deposit account could've just been transferred into my name and this would've been the simplest and safest, but I really didn't want to use that scheme.

Luckily, the tenants seemed very co-operative throughout the sale, and so it was sorted that the Letting Agent returned the deposit to the tenants on day of completion and terminated the existing AST. The tenants had pre-signed a new AST with me (mortgage lender's insistence) which began on the day of completion, and then the tenants forwarded the returned deposit to me to protect as soon as it hit their account (this happened about a week later).

This was all agreed with the tenants prior to purchase, and could've easily backfired as my solicitor pointed out the tenants in reality were under no legal obligation to forward me the deposit. He couldn't make them doing so a condition of sale because I wasn't purchasing from them, they were a third party. I just had to trust my gut feeling that they would co-operate, and am pleased to say they did.

Have you started a new AST, or somehow transferred the existing AST in to your name?


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