Letting agent hasn’t collected enough rent?

by Readers Question

3 years ago

Letting agent hasn’t collected enough rent?

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Letting agent hasn’t collected enough rent?

We have been using a letting agent to fully manage one of our properties for the last 8 years and we pay 10% commission for doing this which includes Landlord insurance.short

Around 2 years ago he found us a new tenant and she moved in and everything was fine. A couple of months after she moved in I checked our account statement from him and could not ascertain why we were getting less money than the rent we agreed.

I phoned him and asked why it was less than the rent and his reply was “that as she is a council tenant her money comes in at different times of the month but don’t worry as it will all sort itself out over the coming months” I assumed that he knew what he was doing as he has been a letting agent for many years and before that he was a senior manager at a large estate agents company.

We have recently been checking the rents on another of our properties that we run ourselves and decided to check this one as well. We have found that he was not collecting the correct amount and so she is now over £2500 under what she should have paid. We originally agreed a £50 reduction in rent per month to enable her to take the property.

We are not sure how to resolve this situation. Does anybody know how we stand with recovering the rent, is it the agents fault and do we have any recourse or should the agent/we contact the council.

Any comments would be greatly received

Simon



Comments

Bill Williams

3 years ago

Are you sure he is not collecting the correct rent from the tenants?

Eduardo Prato

3 years ago

Hi Simon,

You need to establish how much the tenant has actually paid. Any difference between the actual payment and the contractually agreed rent is clearly a rent arrears and you as the landlord can pursue this issue.

However if your figures are correct and the agent has either allowed the arrears to build to £2,500 without notifying you at any stage, or not paid you the funds that he has received, you have a case against the agent.

The agent cannot be blame for the tenant not paying the rent, but he is at fault if he has failed to keep you updated on any irregularities surrounding the tenancy. On the second case (if fund have not been transferred to you), the agent is clearly at fault.

To solve this issue, first of all, ask the agent for a plan to solve the problem (whatever that may be), with a very specific time scale. If that proposal is not of your satisfaction, take the case to The Property Ombudsman or any redress scheme / professional body that the agent belongs to. You will need a proposal (or Final Position) from the agent before you contact The Property Ombudsman / professional body, thus the reason of asking for a proposal from the agent as the first step.

Depending on how bad the relation with the agent may be, I would consider moving the property to another agent. Mind you, as soon as you do that, the agent will have a lesser interest in solving the problem. So it may be better to stick to the agent if you believe that it has been a genuine overseeing that they are keen to solve (sometimes at a loss for the sake of keeping your instruction), but if integrity / ethics are in doubt, move the property to another agent now (and still pursue the case with the professional bodies above-mentioned).

Regardless of the situation with the agent about the poor / unprofessional serviced that you may have received, you can always contact the council to pursue any arrears as the tenancy agreement is between the tenant and the landlord. If you decide to go this route, make sure that the council starts paying any future rent directly to you or the new agent.

Good luck,

Eduardo

garth White

3 years ago

you will have to check your Rental agreement with the Agent and also the AST. then you will be able to see who to take it up with!

Helen Shiels

3 years ago

Hi Simon

Is the agent part of a large national company or are they a small independent?

As a former letting agent working for a large company previously, what sometimes happens in these cases, because the funds are coming from different sources, the rent comes in at different times, and the company captures the bulk of the rent from one source, but fails to capture the smaller amount. This smaller amount will then sit in the companies ring fenced rent account until the agent request it be chased by their accounts department.
If it is a large company request that your agent do this. If it is a small agency, then the tenant is in breach of contract for not paying agreed rent, but this could be due to the agent not requesting this amount, so why would they volunteer it?
Get back to your agent, clarify the amount that they have requested and get them, to set up a payment plan with the tenant to resolve this issue, and I would be looking for a reduction in agents fees or compensation, or both!

Hope this is resolved for you soon.

Helen

Paul Franklin

3 years ago

Housing benefit is paid every 4 weeks - 13 times per year. It's not paid calendar monthly (12 times a year). Can you confirm that based on this you are still recieving less rent than you should be or does this clarify things?

Michael Barnes

3 years ago

Your first step should be to express your concern to the agent and rrange a meeting to discuss it. Specific items you need to discuss are
- what was the agreed rent (and does that match your expectations/records)
- what money has the tenant paid (every payment)
- what money has been paid to you.

If everything stacks up, then it is an error in your calculations.

If it does not tack up, then
- how has the discrepancy arisen.
- what are they going to do about rectifying the historical issues and future payments.

If you are then not satisfied, then take it further.

zoe

3 years ago

I have previously had tenants from housing benefits and received the payments directly from the council. You need to ask to see the council payment advice slips - they show how much has been paid to you (your agent), when, and the dates that this payment covers.

It is correct that the payments are made every 4 weeks instead of monthly, unless there is a public holiday on or around the payment date. Then they pay for an obscure number of weeks, but it always sorts itself out. The slips really help to see what they have paid for and how they have calculated it.

It is also worth noting that the council pay rent IN ARREARS. They do not pay in advance like you would expect your 'normal' tenants to. You therefore may well find that, depending on how much your rent is, it is just the payment in arrears verses in advance that it missing.

Michael Barnes

3 years ago

Reply to the comment left by "zoe " at "31/07/2015 - 01:00":

HB payments to me have always been for 4-weeks even when payment delayed for bank holidays.

Simon Lane

3 years ago

Dear All

Many thanks for all your comments, I am sorry I have not replied but have been very ill over the last few weeks so have not been able to reply to your kind comments. I am now better and looking at my emails now!

I can now update everyone. We are currently still recieving the rent with the shortfall each month. We are in talks with the letting agent, who has been acting for us for over 8 years with this property. They are small independently owned company. He has been chasing the tenant for the outstanding amount and have given the tenant the "extra per month" that she needs to pay in order for her to clear the arrears and to pay the original amount but so far is not getting very far.

My main current issue with the agent is that I brought up the fact that I didn't think we were getting enough rent from the tenant after the first few months in a phone call and his reply was that there was a time decrepancy and that it would sort itself out after a while. The fact that it hasn't has now caused the large debt to build up. Do I have any recourse with the agent as he has not fulfilled his role, can I claim the money from his him as he hasn't done his job properly?

Simon

Simon Lane

3 years ago

Reply to the comment left by "Bill Williams" at "30/07/2015 - 09:36":

Hi Bill

No we are not sure and our initial contact with the council has not been very effective as they will not give out information on a client as we are not the letting agent!

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