Letting Agent collecting rent but not passing on to landlord

by Readers Question

11:39 AM, 31st March 2016
About 3 years ago

Letting Agent collecting rent but not passing on to landlord

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Letting Agent collecting rent but not passing on to landlord

After ten years of successful business dealings my letting agent has suddenly stopped forwarding the rent money. I confirm that this has been paid by the tenants.money

The letting agency asked for time to get matters in order, asked for three months. Due to history of successful business trading, three months was given but to no avail.

Monies still not being transferred. I need to now terminate our arrangements before the end of next month so that I am not experiencing any further losses.

Advice please.

Mary



Comments

Neil Patterson

11:41 AM, 31st March 2016
About 3 years ago

Hi Mary,

Have you checked to see if the agents are members of a Redress Scheme such as the TPO and if they have client money protection insurance?

Steve From Leicester

12:01 PM, 31st March 2016
About 3 years ago

Lots of alarm bells ringing on this - start by instructing your tenants to pay directly to you in future, then as Neil says above, check for current membership of a client money protection scheme.

No agency should need three months to forward the rent to the landlord. Tenants' rents should be paid into a separate bank account (a "client account") which is ring fenced from the rest of the business, so there should always be sufficient funds to pay the landlord once it has been received.

The agent may legitimately need a few days after the tenant has paid to process the payment, but any delay longer than this should set a red light flashing, because there's a very real possibility the agent is using tenants' rent (which legitimately belongs to the landlord) to prop up his own failing business.

Finally, keep your eye on the local media.. Based on what you've said, its highly unlikely you're the only landlord who is currently out of pocket

DALE ROBERTS

9:54 AM, 1st April 2016
About 3 years ago

Steve has stated the obvious. The UK managing and rental industry is so poorly regulated with regards to Landlords that this scenario is becoming far too regular. These agencies (google Oliver-Knights as an example) appropriate funds from landlords and tenants in the full knowledge that consequences for such fraud are few if non existent. Even if they were members of all the correct government bodies at the time you appointed them, if those subscriptions lapse due to non payment, those regulatory bodies will not assist you. And the typical recourse of such managing agents to avoid repercussions for their embezzlement, is to "close shop" and reopen with a slight name change. The UK system has been formulated for rogues to flourish.
ALWAYS ensure your tenants pay you directly. Including deposits.


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