Am I in my legal right to demand rent be paid directly to me?

by Readers Question

11:41 AM, 27th March 2017
About 2 years ago

Am I in my legal right to demand rent be paid directly to me?

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Am I in my legal right to demand rent be paid directly to me?

I have a dispute with the letting agent which is being handled by the Ombudsman. I have written to the letting agent to inform the manager that I am terminating business with them and releasing the agency from all management duties.

I wrote to the tenant to ask him to pay the rent directly to me but he said that the agency has told him otherwise.

Am I in my legal right to demand rent be paid directly to me?

Also, when I informed the letting agent that I have referred our dispute to the Ombudsman and that I will respect their decision whichever it goes, unfortunately the agent’s response was a threat: “pay three times rent value plus VAT within seven days or we will refer the matter to a debt collection agency”!

The dispute is precisely over this charge which I have never agreed to and over the management fee increase (50%).

After speaking to the Ombudsman they seem to think that I have a fair case and they will look into it, but I am faced with a brick wall type of agency unwilling to listen to my grievance or accept the Ombudsman as a mediator.

How do you deal with such stubborn attitude? I want to leave court sanction as a last resort. The agency has changed names since they came into business in 2006 which I am wondering why and it has been run by the same manager who is as stubborn as one can be.

I am happy with the tenant and do not want him to be caught in the middle of the dispute.

Legal advice of where every party stands will be highly appreciated.

Louisa



Comments

Rob Crawford

12:15 PM, 27th March 2017
About 2 years ago

Hi Louisa,

If you have not agreed to the contract termination fee then you do not have to pay it. Most agents, however, will have a termination clause in the agreed terms of business so you do need to check this.

I would write a letter addressed to the agents principle, keep it short and to the point. This is a closing letter. You have terminated the agreement due to the dispute that will be determined by the Ombudsman. If the Ombudsman's concludes is in favour of the agent you will then satisfy any termination clause agreed within the terms of business. Explain that from the date when they were originally informed, you will be assuming responsibility of managing the tenancy and that you will be making arrangements for the tenant to forward rent directly to you. No further communication with the agent is necessary. The threat of debt collection is a threat, I would not worry about this. Write a letter to your tenant that introduces you as the landlord informing him/her that the agent no longer manages the property and that you would like to meet him/her to introduce yourself and discuss how things will change. At the meeting explain that all future rent should be paid to your account, get the tenant to complete a standing order mandate whilst you are there. Instruct him to cancel the current arrangement. Take a completed section 21 with you. If the tenant declines to accept the change then serve him/her with the notice. Explain that don't want to loose her/him as a tenant but you have no option if your wishes as landlord are not respected. Provide tenant with contact details of Shelter and Citizens Advice Bureau and advise him/her to seek legal advice. You need to give the tenant time to confirm their position, there are lots of scammers out there. Your name address should be in the AST, show the tenant this with some ID. Ask them to inform you of their conclusion within a few days. Explain that once the standing order has been arranged you would be willing to cancel the section 21. Basically you have to take control. All the best.

Graham Bowcock

12:50 PM, 27th March 2017
About 2 years ago

Dear Louisa

Basically I agree with Rob and would reiterate that the agent cannot force your tenant to pay him rather than you. The agent is, after all, your agent and should act on your instructions. There is a formal notice under the Landlord and Tenant Act that you should perhaps give the tenant to avoid confusion. this confirms your name and contact details (and in any event is a legal requirement, although if served before, perhaps within the tenancy agreement may have had your agent down as contact previously).

You should check the terms of business your have with your agent as these should set out any charges which are due. If he's trying to raise charges not in the terms then don't pay. Leave it to him to sue you, but if he hasn't got decent terms of business it is unlikely that he will do anything.

It sounds like you need to walk away from this agent if he is not at the very least prepared to have a proper discussion with you. His fees may be justified in terms of the extra work required for compliance matters and the like, but he should be able to explain this.

Good luck
Graham

Edwin Cowper

16:29 PM, 27th March 2017
About 2 years ago

I wonder whether you should start at an earlier point. You casually mentioned that the agent had changed names several times since 2006.

The starting point should be: do you have any contractual agreement with this person? If so, how? If so what is it?

You need to consider what you have signed or agreed by action with this agent using this name. Its possible that there is no contract between you, if you are no longer employing the same legal entiry.

For example, if you started using ABC Limited run by X but now XYZ limited run by X is running it, you may not have any contract between you and XYZ. Read what if anything you have been sent by XYZ and agreed.

Work from there.

One occasional downside to this site is that people assume that there are binding agreements when there may not be. Also I wouldn't be surprised if the Ombudsman made the same assumption.

Bill O'Dell

17:26 PM, 27th March 2017
About 2 years ago

The payment of rent is a matter of contract and will be specified in the Lease. If the Agent used a lease that is written in their favour, then it may not be as easy as is suggested above. If you establish a good working relationship with the tenant then you can move mountains. Check the lease your Tenant holds and see what that says, then the agreement with the agent. You might be pleasantly surprised and it is all under your control, but you may not. Good luck!

Kate Mellor

18:47 PM, 27th March 2017
About 2 years ago

Reply to the comment left by "Bill O'Dell" at "27/03/2017 - 17:26":

Hi Bill, even if the AST stipulates instructions for paying rent, the agreement is between Tenant & Landlord and therefore any instructions from Landlord to pay in a different method constitutes a variation of the AST

louisaa91@gmail.com

21:05 PM, 27th March 2017
About 2 years ago

Reply to the comment left by "Rob Crawford" at "27/03/2017 - 12:15":

Hello Rob,

Thanks for reply. The tenant has been made to believe by the Letting Agency that the contract is with them. This is a quote of an email from Letting Agent sent to him : "Please be advised that as your contract is with us you should continue to pay rent to X agency until either your contract expires or until further notice from us."
I have sent him page one of the Tenancy Agreement which clearly states that "this agreement is between the Landlord and the tenant" but I could not convince him. The manager of that agency is a skilled bully...
I cannot be in control unfortunately due to location and the Letting Agent knows it. I could regain control by being ruthless and threaten the tenant with eviction
but that would not be right, so I refuse to go down that path.

louisaa91@gmail.com

21:14 PM, 27th March 2017
About 2 years ago

Reply to the comment left by "Graham Bowcock" at "27/03/2017 - 12:50":

Hi Graham! What is this notice you are referring to? If you have a link to it, kindly share it with us.

Thanks for input and good wishes.

louisaa91@gmail.com

21:15 PM, 27th March 2017
About 2 years ago

Hi Graham! What is this notice you are referring to? If you have a link to it, kindly share it with us.

Thanks for input and good wishes.

Graham Bowcock

21:20 PM, 27th March 2017
About 2 years ago

Dear Louisa

From what you have now said it looks like you do have a bit of a problem that may not be easy to sort out for yourself, especially if you are remote.

As your agent is obviously not going to co-operate you do need to take some positive action quickly. It is probably worth going to a good property solicitor to get this sorted; the longer it goes on the greater the risk for you that something will go wrong and you will finish up out of pocket. It may cost a few hundred pounds for a solicitor to read the paperwork and get some letters out to both agent and tenant but that is probably going to be money well spent.

It is unfortunate that the tenant does not accept your position as landlord; depending how things go he may well be a casualty of the situation. Not his fault, but if you need to make him take notice of you, a s21 notice may be needed. I do wonder though if your agent is up to date with the necessary compliance - if he's a wrong 'un you may find a few skeletons in the cupboard.

Graham

louisaa91@gmail.com

21:29 PM, 27th March 2017
About 2 years ago

Reply to the comment left by "Edwin Cowper" at "27/03/2017 - 16:29":

This is a very pertinent point, Edwin. The one-page document I signed is under one company name but the so-called brochure is under another. The so-called agreement (one page) I was sent by email and signed does not mention the terms of business. At the time of signing it I honestly thought that a proper contract would follow then I got busy with my day-to-day life and forgot all about it, till I was hit by management increase and demand I must pay three times the rent value plus VAT to come out of agreement, something that one page document does not mention a word about.

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