Rent2Rent Scheme Gone Wrong

Think you may be mixing your metaphors here Marie and this is the last straw, not the icing on the cake.

Apologies for delayed comment Mark did flag this up to me late last week but have been out of circulation.

Right

I agree with Mary in almost every respect here, the only one I doubt is her comment about the Court looking at occupancy and not contract but she must have sound basis for saying this as her advice is always practical and well founded.

If you have a Company Let then you have a Company Let, first last and always.

On that basis I just fail to see where any legal argument can lie with the company as clearly as Mary says the deposit did not need to be registered. It was a company let and so outside the TDP provisions so no claim can be raised in that respect.

Quite how the company can even attempt to claim back the balance of the deposit defeats me, and how they can possibly claim £5000 - where is there loss? My guess is it is all a big bluffand that on the hearing date they won't show.

I have seen their approach countless times as the best form of defence is attack approach. So when faced with a legitimate claim these rogues claim ludicrous amounts designed to frighten you off. You have to decide whether to be frightened off, but I'd be amending your defence counterclaim too and claiming for far more and I assume rent arrears as it sounds like a miracle if all the rent was ever paid to you.

If you have the weight of evidence that you say then counterclaim hard and show these people for what they undoubtedly are - rogues, crooks and charlatans.

One final point you ask for legal help but in the Small Claims Court often this is not allowed and you need to clarify with the Clerk to the Court. Otherwise you need a no win no fee firm and their attitude will tell you whether your case is as strong as you think, and the company's as weak.

There is no doubt that these 'investors' are indeed Rogues, Crooks and Charlatans, but to refer to R2R as the next 'Get Rich Quick Scheme' targeting wannabee property investors, or indeed as a 'Scam', is wholly inaccurate!

R2R is a strategy that has been around for many many years, used by professional investors. With finance so hard to come by and rooms in such high demand it's no surprise that R2R has come bubbling up to the surface.

Like every other industry on the planet there are those who operate with integrity and those that do not.
In this particular case there were mistakes made on both sides, a difficult exit from the deal seemed inevitable.
I know of many investors, including myself, who run R2R alongside other strategies very successfully and will continue to do so.

I actually invite LL's to inspect properties or issue reports if they are unable. This week I had a first visit in 2 years from a LL who commented 'The property is in better condition than when I left it'. We have NEVER been late on a payment. We have all insurances and warranties in place. We create a safe home for our tenants.

I also run a R2rR course - the Multi Let Cashflow System, we don't charge thousands we charge £497. When you balance this against the profit we make from 'our' properties - between £600 and £1k, it is a fair cost.
I won't become a millionaire from R2R (?) but it is serving me very well as it is a multitude of other investors.

Don't be shocked or put off by the occasional bad press and sensational reports of R2R being evil and wanting to eat your children!! :-O

Dear Industry Observer

Metaphor mix up because I'm brain addled with too much on my plate!!! Thanks to everyone for commenting here, I appreciate the support. Just a footnote; the contract signed was an AST; the tenant a company who in turn sub-sublet the house. The company 'tenant' supplied the agreement and I amended to accommodate sub-letting otherwise I would have little proof. I have proof the gas and elec were in the company name and am trying to see if the Council Tax was changed to the sub-let tenants names? I don't know how I can counter claim for anything, I deducted funds from the deposit, I have proof for those deductions and I am assuming the Judge will decide if I stopped funds from the deposit ligitimately? I did request that the claimant provide a copy of his contract with the sub-tenant as this would accommodate any deposit deduction he would be able to recover from them but he hasn't entered into any correspondence, statement nor has he provided the contract?

Marie I think your last couple of sentences say it all, this tenant should also be asked for all these documents in Court, and to show whether a deposit was paid by the sub-tenants and if so whether it was protected as my guess is they will be on some form odf AST, probably the sharers version (AST on own room/licence on common parts).

How you counterclaim for anything else is damages for the distress caused to you.

If it is an AST but with a company named tenant and signing as such then there can be no question of TDP and thus you cannot possibly have committed an offence.

out of interest must the company be a plc or ltd to qualify as a company let? or could a 'company' be just individual/s trading under a company name?

Even if the company is a single individual trading as a company (he/she would have to register with Companies House and provide yearly audited accounts) a person cannot just call themselves a company without adhering to regulations. Therefore if its an individual company of one and a named secretary, a company with 2+ directors or Plc it would still be a company let. Anyway, that would be my understanding of the position.

hi marie
pretty sure thats not correct. companies house is not for sole traders or unlimited partnerships etc. however, if you are self employed you do need to notify hmrc and tell them the name (i.e. company name) you are trading under.

Thanks Industry Observer for your comments. I certainly hope the Judge sees it that way? If they don't provide any requested paperwork and are seen to be uncooperative then hopefully the Judge will take a dim view. In all correspondence, prior to the court action I have requested to meet to discuss the discrepancies (if any, which I believe we're all legitimate deductions), providing contact numbers etc and on each occasion I was challenged with Court. I agreed to mediation but heard nothing further. One of the reasons of regulating deposits was to reduce pressure on the Courts; so I do think that this should be a consideration where there is a definite lack of consultation or endeavour to resolve the situation? Had this 'Company' met me then all this would not have been necessary however I think if I had returned all the deposit (cut my losses and just let them get away with it) I think they would still be bringing this action? Perhaps they do it to all their LL's, provide the wrong agreement, take LL to court in fact it might form a large part of their revenue?

To sign a Company Let, or more correctly a letting to a Company, it must be a Plc, a private or public limited company

For Joe Bloggs. I am referring to Ltd and Plc not individuals running a business with a company type name. Industry Observer said it better than I , apologies if I did not make myself clear. Suffice to say, I signed an agreement with a Ltd company, referenced the company not the person etc.