Agent charging their fees from tenant's deposit

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    Agent charging their fees from tenant's deposit

    Hi All,

    I am the landlord of a property that has been let via an agent.

    This agency insists on charging their management fees for the whole tenancy term in advance every time (citing their "standard procedure"), and actually subtract their fees from the deposit paid by the tenant.

    As I see it, there should be 2 separate transactions at the onset of every tenancy

    1) The Deposit paid by the tenant to the Agent/Us, which we then put into DPS.
    2) The fees paid by us to the agent, which may need to be adjusted between us if the tenant leaves early, etc.

    This agency is effectively merging the two transactions, so they take the fees out of the deposit, and basically make me pay the deposit out of my pocket.

    Is this legal? Isn't the deposit amount tenant's money that we (the landlord/agent) have no claim to until much later, and needs to be kept separate?

    They not been thorough and professional enough in keeping the books, and have never returned the amounts due to us promptly, by themselves, and without us having to writing 200 emails to "prove" every point we are making.

    They have even lied to us on several occasions - e.g. they have claimed they never received certain amount, or have paid something to us, which was later proven to be incorrect. In one case, they sent an invoice for our fees to the tenants, and never bothered to copy us.

    A tenant left early. I had already paid the deposit out of my pocket to the DPS, and the fees to the agent, and am left chasing them both.

    Regards,
    Viv

    #2
    This should be in the "Letting Agents" forum.
    If you know they operate like this, then why do you use them?
    Allow tenants to protect their own deposits. I want free money when they do it wrong

    Comment


      #3
      Originally posted by thesaint View Post
      If you know they operate like this, then why do you use them?
      Well, I discovered some of these irregularities from the past tenancy only after the latest tenant started with them.

      I want to see if their "procedure" re: deposit is a fair one and has any legal basis, especially noting that this procedure requires careful accounting, and they have been unable to do it in the past.

      What are my best options of breaking away from the agents? Are their any standard rules with The Property Ombudsman (TPO) code of conduct that allows me to get rid of them, as they have been so incompetent?

      Comment


        #4
        Originally posted by thesaint View Post
        This should be in the "Letting Agents" forum.
        Apologies, I am new here. Can I move this to the other forum? Or should I post a fresh one?

        Comment


          #5
          Fire the agent. Get copies all paperwork. Protect deposit yourself in your own name.

          There are good agents out there...
          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

          Comment


            #6
            We have had this discussion before. I'll leave someone else to search for it.

            Assuming, as is probably going to be the case, that an agent's obligation to hand over the deposit to the landlord and the landlord's obligation to pay the commission arise at the same time, I cannot see that an agent does anything wrong or unprofessional by accounting to the landlord with the difference between the deposit and his commission. It is surely normal procedure for all businesses to operate in this way by offsetting credits against debits. The fact that the deposit is regarded as the tenant's money does not change the position because money is fungible - one pound is as good as any other. The landlord has effectively received the deposit. He is in no different position from where he goes into the agency and is paid the whole of the deposit in cash and before leaving pays the commission in cash using some of the bank notes he has been given. The tenant is not prejudiced beyond the risk he runs anyway.

            Comment

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