Payment by letting agent of rent less fees received early

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    #16
    Just to clarify - the legal advice was that the tenancy had been granted once it was signed both parties (and that it was not necessary for the tenant to have taken up occupation for the tenancy to be granted).
    As it happens, in our case, the tenant was already in occupation as the problem of non-release of rental monies ahead of the tenancy start date was for an extension of tenancy.

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      #17
      My understanding is that it has to be executed as as deed for that to happen. In any case, I think most of the landlords here would let tenancy go periodic.

      For many purposes, the renewal is a new tenancy.

      Comment


        #18
        While it might sound nit-picking, there is a difference between granting a tenancy and a tenancy coming into being and it isn't possible to "extend" a tenancy.

        However, if the tenant is already in place, pretty much everything written in response to your original question is wrong or academic.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #19
          Interesting that you say that “ if the tenant is already in place, pretty much everything written in response to your original question is wrong or academic”.
          So, how would you respond knowing this, i.e. if the tenant is already in place, with both parties having signed a new tenancy agreement and the tenant having paid the full year’s rent in advance to the letting agent, all well in advance of the new tenancy start date, should the letting agent release the rent, less management fees, to the landlord within 5 days of receiving the rent (i.e. in accordance with the management agreement) or is the letting agent correct to assert that “until the tenancy has commenced, rental payments are not legally due to the landlord and will not be paid”, i.e. until on or after the tenancy start date?
          The legal advice I received stated that the letting agent should, in these circumstances, pay 5 days after receipt of the Moreno themselves, even if this is well in advance (by 3 weeks) of the new tenancy start date.

          Comment


            #20
            Gremlins - read rent monies in lieu of “Moreno”!

            Comment


              #21
              What the letting agent has to do with the money is governed by the agreement you have with the letting agent, there's no governing legislation (as far as I know) and, while it's possible there's some best practice statements by trade bodies, they're unlikely to be legally binding.

              If whoever gave you the legal advice has read the terms of the agent's agreement with you, I'd guess that's where the 5 days figure has come from, otherwise, I have no idea.

              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment


                #22
                Yes, I told the lawyer that the management agreement states payment to landlord within 5 days of receipt by the agent.
                So, what has changed from your earlier advice that what I was trying to achieve "probably isn't legal" (see your post no.3)? Is it just the fact that the tenant is already in place?

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                  #23
                  Pretty much.

                  You can't have rent for a tenancy due before it starts. So a payment before a tenancy starts isn't rent until it falls due.
                  It has to be some kind of deposit - and there's a good chance it would be a holding deposit (and it's too high a value for that for a new tenancy).

                  I don't think that it is actually a holding deposit, but someone might decide that it is.
                  However, an existing tenancy wouldn't be subject to the limit on a holding deposit (although that will change next year), so that's simply not an issue.

                  If it's not a holding deposit, the money requires protecting within 30 days of reciept, which would be an issue if it was the first tenancy, because you would obviously never protect the deposit and it would be transformed into rent when the rent became due.
                  And if the tenancy didn't start that could be problematic.
                  Again, it's not possible for some kind of tenancy to start unless the tenant moved out at the end of the previous agreement, which would be inconsistent with them paying a year's worth of rent.

                  And any tenancy agreement with rent due before the start of a tenancy is a legal nonsense, but it's much less of a practical concern if the tenancy is a replacement tenancy.

                  And, if the agent should pay you within 5 days of their receiving the money, they should.
                  More concerningly, I don't see why they wouldn't.
                  They can't use it for anything, they can't earn interest with it and it's just sitting there in a bank account waiting to be transferred.
                  When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                  Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                  Comment


                    #24
                    I also note a previous comment (post No.17 by leaseholder17) that "most of the landlords here would let the tenancy go periodic". I am personally against this, as I have no control over when the property comes available for letting to a new tenant. For example, I like to avoid a property coming onto the market again in November & December as I have noticed a marked reluctance of tenants to commit just before Christmas - higher end properties (and possible all properties) remain on the market unoccupied longer at that time of year. i much prefer a 12 month renewal, with an end date at the right time of the year (spring/early summer).

                    Comment


                      #25
                      Not suprisngly I am confused about new Ts and how original 12 month advance was described inAST.
                      Does your Agent have a specific date each month for disbursement of received monies to LL?
                      Within 5 days of receipt could compromise Agent's visbility.

                      Comment


                        #26
                        The rent for 12 months is not an "advance", but payment in full for 1 year in accordance with the special clause in the TA which states "Notwithstanding the Principal Terms in respect of the rental payments, the tenant agrees to pay the sum of ...........in respect of (the full year with dates given) on or before (the date 21 days prior to the tenancy start)".
                        Why would payment within 5 days of receipt "compromise Agent's visibility"? I am not sure what you mean.

                        Comment


                          #27
                          Based on that term, any statutory periodic tenancy that did arise would probably be annual (rather than monthly).
                          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                          Comment


                            #28
                            Additional thanks for your contributions. It looks as though my complaint against the letting agent will go its full course through to The Property Ombudsman (unless the agent has a rethink in the next few days with all the extra ammunition I've provided over the past week or two).
                            I've looked at the TPO website and understand the process, timescales etc. My query is - to anyone who's been through the process - how frequency do the TPO improve on the 16-18 week turnaround time for a decision (i.e. from referral), how do you rate their decision for fairness and any other points that you might wish to highlight from your experience?

                            Comment


                              #29
                              That's "frequently", not frequency!

                              Comment

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