Taking over management from agent closed 3 months into contract?

by Readers Question

10:53 AM, 27th November 2017
About 11 months ago

Taking over management from agent closed 3 months into contract?

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Taking over management from agent closed 3 months into contract?

I have been very unfortunate to have trusted an agency to manage my property who has shut down 3 months into a 6-month management contract.

I have a tenant in situ at my property and they are keen to stay long term. I now need to take over and manage this property myself. I know I can give it to another agency to manage, but I have lost my confidence after what happened and would prefer to manage myself. The tenant would also prefer me to manage as the last agency never responded to them, nor notified me of anything they requested.

Everything I have searched on the internet regarding the topic of “taking over management of my property” has been geared towards the legalities and obstacles one would face having to terminate the contract and make a new one, and how the agency will fight them in court etc. Clearly this is the wrong route for me as the agent does not care what I do as they have shut down.

I would really appreciate if somebody with knowledge could clarify the following points for me:

1 – Do I have to make a new contract with the tenant?

I have been told by some that I do, and others there’s no point as I could just leave the old contract as it is rolling and the agency are gone. Also all checks etc have been done by the agent previously so no point having to go through everything again?

2 – What happens with the deposit?

The deposit is currently held in a deposit scheme which the agent sorted out (depositprotection.com). I have been told that I need to register with them and then transfer to my name? Any direction as to the proper way to do this would be much appreciated. Considering this would be based on either creating a new contract OR keep existing as mentioned in point 1 above.

3 – Apart from the 2 points above is there anything else important which I have missed?

I am new to this so I’m doing whatever I can based on what I read and learn from others. Any guidance as to anything I have missed would be much appreciated.

Many thanks

Mike



Comments

Dennis Leverett

12:24 PM, 27th November 2017
About 11 months ago

Can't answer your questions but I've used https://www.lettingsupermarket.com/ for a few years without any problems and no voids, excellent service and value for money.

Paul Kaye

12:27 PM, 27th November 2017
About 11 months ago

Well bad luck! I would never ever use a management agency.
Managing property is not rocket science.
One,take out rental insurance.
two,take out boiler/heating insurance and see you get a gas certificate and service each year.
three,contact the deposit company the deposit is registered with,ask do they have the money or is it held by your old agency? many deposit protection companies are just insurance based and the landlord is the holder of the deposit money! you agency may have run off with the deposit !? if so ,this may be a police matter.
four,have a list of good plumbers/electricians etc you can call on when needed.
If you do not have time for this(which will not take much time) pay someone,like a family member and pay them(tax deductable)on your BTL business.!
Make sure you have Landlord insurance for your properties too.
As to the tenancy agreement,do you have a copy? if so let it just roll on,you can update all this with the deposit insurers,but as I say do they have the money or does your old agent !?
I manage 4 properties and have only had to call a plumber once this year for one property.
My properties all have boiler/heating cover and a gas cert /service done each year.
good luck ,it is not that hard to manage properties,unless you have say 50+ even then its a job after all!
Paul

Roger P

13:22 PM, 27th November 2017
About 11 months ago

Sign up with MyDeposits and you can hold the deposit yourself, plus everything paul above has said

Sami Houmrani

17:25 PM, 27th November 2017
About 11 months ago

First you need to serve the tenant with section 48 Notice noti fcation of landlord’s address for the service of noticesy.

By going into rolling contract if the tenant don’t pay the council tax you are liable for the bill.
I would recommend assured hold tenancy agreement.

One of the main advantages of self-managing your investment property is that you can avoid spending money on management fees. Self-managing your property also means you can play a bigger part in choosing a tenant. You can personally look at the application forms and speak with the potential tenants yourself.

Rob Crawford

21:30 PM, 27th November 2017
About 11 months ago

Assuming the current AST's are well written they can stay in place . The AST may already have your name and address in it as well as the former agent in which case section 48 is already complied with. You will need to advise your tenants and rearrange rent payments into your own account. Registering with the same deposit scheme is the easiest way of getting the deposits transferred into your account. Deposit Prescribed Information will (should (check!)) already have been served under that deposit scheme. You could always chose a different scheme at a later for the next tenant if that way inclined. There are many rules and regulations (Local Authority & Central Gov't) and whether you can successfully manage them or not depends on the effort you are willing to put into learning the business and keeping current. Good luck.

James Thomas

12:16 PM, 28th November 2017
About 11 months ago

Hi Mike,

I'm the Operations Manager for the Deposit Protection Service, and I'd be happy to help you out with point 2.

As Paul K points out above, the process we need to follow depends on whether or not the deposit was protected using our Custodial or Insured scheme.

If the deposit is in the Insured scheme, then the Agent will have held the money themselves, in which case there's not a lot we can do as we're not in control of the funds. Your best bet here is to seek legal advice regarding the missing funds, but the Insured scheme does provide a contingency for this type of scenario.

If it's in the Custodial scheme, then we'd look to transfer ownership of the deposit to you. Ordinarily you would register and give your landlord ID to the agent, who would then be responsible for completing the transfer. However, if the agent is out of business, there is a process we can follow where we can facilitate the transfer of ownership of the deposit to you.

If it turns out that the deposit is in the Custodial scheme then you'll need to register as above: - you can do this by visiting http://www.depositprotection.com and clicking "Join", or you can call our Customer Service Team on 0330 303 0030 and they'll go through it with you.

In order to check which scheme it's in, just send the details of the tenancy to my email address, along with proof of ownership for the property in question, to James.Thomas@Computershare.co.uk, and I'll come back to you with next steps.

Thanks

James

Annie Landlord

17:13 PM, 28th November 2017
About 11 months ago

"By going into rolling contract if the tenant don’t pay the council tax you are liable for the bill.
I would recommend assured hold tenancy agreement."
I've never been held responsible for CT and all mine are on rolling tenancies.
You will be able to transfer the deposit to your name if you use the same scheme but if the deposit 'comes out and goes back in' you may have to reissue the prescribed information to the tenant. The deposit scheme will talk you through it all. I have taken tenancies off agents in the past who simply weren't managing the properties well. The NLA told me I didn't need to issue a new tenancy, but you do have to send a standard form to the tenant informing them of your name and address for the serving of notices. If you sign up to the NLA or RLA (about £80 annual fee) you can ask advice via their free helpline and all the forms you need can be downloaded from their website.

Sami Houmrani

21:35 PM, 28th November 2017
About 11 months ago

Hi
The Tenant is responsible for the council Tax as long as they have aMaterial Interest in the property, unfortunately this is defines by case law as the 6 months of the Tenancy and does NOT apply to rolling Tenancy contracts.

Sami Houmrani

21:55 PM, 28th November 2017
About 11 months ago

Reply to the comment left by Annie Landlord at 28/11/2017 - 17:13
Hi,
A word of warning, due to the changes in council tax law making us liable to pay the council tax from when the tenancy is up this only goes up until the end of the 6 month short Hold Tenancy agreement.

Tim Wragby

22:41 PM, 28th November 2017
About 11 months ago

Hi
I am sorry to hear your news as the agency closing so soon will cause a headache for you until you get your head round becoming a responsible landlord. I am also concerned at the amount of spurious information given above.
James T has given you good info and there is other good info embedded within some posts. If at all possible try and get hold of anyone from the agency and recover all the paperwork they hold. If you cannot do this arrange a meeting with your tenant and explain situation and ask to see their paperwork regarding the tenancy and see if it is valid. If you are not experienced you may not know what you are looking at or what is missing.
Your agent should have:
1. carried out a Right To Rent Check - and agent kept proof of ID taken
2. Created, issued and sighed on your behalf a tenancy agreement - usually an Assured Shortterm Tenacy agreement which lists you as Landlord & names all adult tenants - Agent & Tenant should have copy
3 Created & had tenants agree & sign an Inventory/schedule of Condition report. -Agent & tenants should have copy
4 If deposit has been taken - Agent should have registered deposit within 30 days and issued tenants with certificate of deposit and also issued tenants with signed copies of Prescribed Information- follow JTs advice re transfer of deposit custody
5. Issued tenants with copy of DCLG pamphlet - How to Rent at start of tenancy
6. Issued copy of EPC to tenants
7. Issued copy of Gas Safety Certificate (if appropriate)
8. Signed proof that the smoke alarm s were tested on the day of tenancy start

If your property is in an area where the local council has a Landlord Licensing Scheme there will be many other legal requirements too that your agent should have ensured you complied with.
As you can see it is not as straight forward as some above state and if you miss any of the above you may not be able to seek possession through the courts as failure to issue correctly invalidates possession through the courts. Claiming it was your agent who failed you is not a valid claim in court as far as I am aware.
Self managing is very possible but you will need to do a lot of studying and getting a relative or friend to mAnage for you and pay them is no longer legal unless they set themselves up as an agent and join an ombudsman scheme get insurance etc
I would recommend seeking a good, qualified agent to get your tenancy back on track while you join a landlords body like NLA or RLA and follow their training packages so that you are fully informed. Once you are ready you can withdraw from your agency agreement but the onus will be on you to keep up-to-date with changing legislation.
Good luck

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