Obliged to offer tenancy or not, your views

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  • Obliged to offer tenancy or not, your views

    I have a house that has been on the rental market for a while. An offer from a prospective tenant came in through the agent I had appointed. The offer was not attractive on the basis that the tenant would be coming through a scheme where the deposit is insured and the rent is paid in arrears. Despite not having any other offers I instructed the agent to 'proceed' that is, to request the AST from the scheme as it would be them that provides it. A provisional moving in date was set for 1 week later. No deposit, holding or otherwise, was ever put down.

    A better offer came in through another agent where the prospective tenant offered the asking rent, 4-weeks rent as deposit and 1 month rent in advance. A holding deposit has been put down.

    I decided to proceed with the second better offer and the first prospective tenant is now kicking up a fuss. The agent is putting the ball in my court and blaming me for rejecting the first prospective tenant.

    The first prospective tenant has just told the agent that she had given her current Landlord notice. Very short notice by the sounds of it. The same tenant also says that the Landlord has found another tenant for her current house, which I find rather unbelievable because my 'please proceed' email was dated 18 February 2010. The same tenant has sold her cooker and some possessions in view of my request to proceed to contract.

    I have not had sight of the contract (AST) from the scheme nor have I signed it.

    I am annoyed that the agent provided a copy of my email to them to the prospective tenant. This seems to be a breach of confidentiality and possibly a breach of their duty of care to me as a Landlord.

    What are your views and experience on the above?

  • #2
    Whether you have a contract with the first applicant depends on what went on between the applicant and the agent. What was agreed exactly?

    Comment


    • #3
      Originally posted by betteroffer View Post
      I am annoyed that the agent provided a copy of my email to them to the prospective tenant. This seems to be a breach of confidentiality and possibly a breach of their duty of care to me as a Landlord.
      The agents may be in breach of the Data Protection Act. If you're unhappy with their service, terminate their contract (and report to ICO, if applicable).
      The information in my posts is provided 'as is'. This is not intended to be legal advice. Legal or other professional advice should be sought before acting or relying on this information or any part of it. I will not be held responsible for loss or damage arising from errors in the information or the way in which a person uses the information on this . For more information on your query use the '' link at the top of this page. Agreements, Forms & Notices can be found .

      Comment


      • #4
        Well, I am not suprised that your first prospective tenant is bitching about your refusal to accept him/her This is because they are not able to offer the usual terms (i.e deposit and 1st. month's rental in advance) so they are having much difficulty in finding rental property on the terms that they can offer. They even have the cheek of offering YOU an AST that they are prepared to accept. It should be the other way around! If you have not signed an AST and your agent has not done so on your behalf (whether or not he has been authorised by you to do so) then you have nothing to worry about. I doubt very much that this tenant has offered notice to their existing landlord - they are merely applying as much moral pressure as they can to make you accept them as a tenant. I wouldn't touch them with a bargepole!

        P.P.
        Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.

        Comment


        • #5
          Thanks for your reply.

          I could not be entirely certain what was said/done by the Agent but they have emailed me a few times stating whether I wish to proceed with the applicant, these were on 18 Feb. On 17 Feb the Agent said the applicant came into the agent's office with proof of residency (at the agent's request, not mine) and the agent's email states "but obviously need to go ahead from you before we can do anything"

          On 18 February I emailed "Please proceed with X application"

          The above is all the applicant is relying on. My email to the agent was merely to progress the application further and was by no means a final decision until I have sight of the AST and signed it.

          The applicant was, in my view, foolish to tender notice and start notifying utilities without a tenancy having been secured. I do not know what the terms of that AST will be because the AST is provided by the scheme who also broker the rent guarantee and deposit insurance.

          The agent has stated in an earlier email when I said that I was 'considering other offers...' that I am entitled to consider my own best interests.

          Comment


          • #6
            Originally posted by tom999 View Post
            The agents may be in breach of the Data Protection Act. If you're unhappy with their service, terminate their contract (and report to ICO, if applicable).
            I will deal with the Agent later, they will get the sharp end of the stick from me when I have dealt with the tenant. The agent clearly was trying to pass the buck

            Comment


            • #7
              Originally posted by P.Pilcher View Post
              Well, I am not suprised that your first prospective tenant is bitching about your refusal to accept him/her This is because they are not able to offer the usual terms (i.e deposit and 1st. month's rental in advance) so they are having much difficulty in finding rental property on the terms that they can offer. They even have the cheek of offering YOU an AST that they are prepared to accept. It should be the other way around! If you have not signed an AST and your agent has not done so on your behalf (whether or not he has been authorised by you to do so) then you have nothing to worry about. I doubt very much that this tenant has offered notice to their existing landlord - they are merely applying as much moral pressure as they can to make you accept them as a tenant. I wouldn't touch them with a bargepole!
              P.P.
              My thoughts entirely and I am standing my ground because if this is how they portray themselves to be then I have no desire for them now. If the applicant had put down a holding deposit I would have then honoured the agreement.

              The agent knew I was hesitant with the rent being paid in arrears but the agent, with his usual sales patter, was trying to convince me the applicant is a safe bet because the rent is insured. I was not really that bothered about the insurance because this can be obtained easily at low cost. The agent's fee would have been 4 weeks rent, plus inventory cost plus VAT and this I would have to pay out of my pocket and not from any advance rent payment.

              The agent dealing with the second offer charges 3 weeks rent inclusive of VAT. Any landlord would go for that offer especially when they put down a £200 holding deposit.

              I guess the applicant is annoyed because they have lost out on a newly developed house.

              Comment


              • #8
                Just to repeat, what is important here is what happened between the agent and the applicant. Since there is no question of the agent not being your agent, the applicant was entitled to assume that the agent had power to agree a tenancy. The sole question therefore is whether the agent did anything that amounted to agreeing to grant a tenancy and remember that it does not have to have been agreed in writing. All the following are irrelevant:

                1. Whether you gave the agent the go-ahead or not and what the agent did or did not say to you at any time.

                2. What arrangements the applicant made concerning his existing tenancy.

                3. Any suspicions you may have.

                4. The fact that a better offer came along or that the terms of the first offer were unusual.

                Comment


                • #9
                  Originally posted by Lawcruncher View Post
                  Just to repeat, what is important here is what happened between the agent and the applicant. Since there is no question of the agent not being your agent, the applicant was entitled to assume that the agent had power to agree a tenancy. The sole question therefore is whether the agent did anything that amounted to agreeing to grant a tenancy and remember that it does not have to have been agreed in writing. All the following are irrelevant:

                  1. Whether you gave the agent the go-ahead or not and what the agent did or did not say to you at any time.

                  2. What arrangements the applicant made concerning his existing tenancy.

                  3. Any suspicions you may have.

                  4. The fact that a better offer came along or that the terms of the first offer were unusual.
                  My father had a tenant try this on once. A tenant agreed a lease on an office, and the agent stupidly gave him a key to move some stuff in. On reading the documents my father found out he was an estate agent who he refused to have as tenants.

                  The tenant's solicitor wrote claiming stationary costs, telephone connections, signage etc. totalling £5000.

                  My father wrote back pointing out that the lease had never been signed, and that the agents let them in without his permission. The case was dropped, and we never heard from them again.

                  Comment


                  • #10
                    Originally posted by betteroffer View Post

                    On 18 February I emailed "Please proceed with X application"

                    The above is all the applicant is relying on.
                    Notwithstanding whatever the agent may have agreed on your behalf, it seems to me you agreed to proceed with the application, not with the actual tenancy. I don't see how could you agree the tenancy before having seen the tenancy agreement - it might have contained terms you disagreed with. I presume you were also planning to carry out some credit/reference checks.

                    Comment


                    • #11
                      Originally posted by jamesknight0 View Post
                      The case was dropped, and we never heard from them again.
                      That does not change the law! The tenant had a case.

                      I am no expert on the law of agency, but I think it goes like this:

                      If someone (A) holds himself out to be the agent of another (B) and is in fact not the agent of B then anything that A agrees with C is not binding on B unless ratified by B. C's remedy is to sue A for breach of warranty of authority.

                      If A is the agent of B then:

                      (a) anything that B authorises A to do, A may do and if he does is it B is bound by it;

                      but also,

                      (b) anything A does without B's authority or even if B expressly forbids it, will bind B if it is the sort of thing that comes within A's ostensible authority. If A is a letting agent then A's ostensible authority extends to signing a tenancy agreement or otherwise creating a tenancy because that is the sort of thing that letting agents do. C is not put on enquiry as to what precise authority A has. If B is aggrieved by any action that A does on his behalf without express or implied authority then B's remedy is to sue A.

                      Comment


                      • #12
                        Originally posted by Lawcruncher View Post
                        That does not change the law! The tenant had a case.

                        I am no expert on the law of agency, but I think it goes like this:

                        If someone (A) holds himself out to be the agent of another (B) and is in fact not the agent of B then anything that A agrees with C is not binding on B unless ratified by B. C's remedy is to sue A for breach of warranty of authority.

                        If A is the agent of B then:

                        (a) anything that B authorises A to do, A may do and if he does is it B is bound by it;

                        but also,

                        (b) anything A does without B's authority or even if B expressly forbids it, will bind B if it is the sort of thing that comes within A's ostensible authority. If A is a letting agent then A's ostensible authority extends to signing a tenancy agreement or otherwise creating a tenancy because that is the sort of thing that letting agents do. C is not put on enquiry as to what precise authority A has. If B is aggrieved by any action that A does on his behalf without express or implied authority then B's remedy is to sue A.
                        If the tenant had a case, and had already gone to the expense of consulting a solicitor, why would the case be dropped? Obviously because the solicitor told him he did not have a leg to stand on.

                        Regarding this case, I was going to quote Westminster's post before yours here, but can't work out how to do it.

                        Comment


                        • #13
                          Originally posted by westminster View Post
                          Notwithstanding whatever the agent may have agreed on your behalf, it seems to me you agreed to proceed with the application, not with the actual tenancy. I don't see how could you agree the tenancy before having seen the tenancy agreement - it might have contained terms you disagreed with. I presume you were also planning to carry out some credit/reference checks.
                          That was my intention as expressed in the email to proceed the application which should not be construed as to mean a final conclusive decision arising to a security of tenure but to proceed to the next stage, that is, to obtain copies of the proposed contract from the scheme operators. The scheme operator was in fact acting on the behalf of the applicant. The situation may have been different if my agent was to prepare the contract as I would have knowledge of the full terms.

                          References were checked by the scheme operators.

                          Comment


                          • #14
                            Originally posted by Lawcruncher View Post
                            That does not change the law! The tenant had a case.

                            I am no expert on the law of agency, but I think it goes like this:

                            If someone (A) holds himself out to be the agent of another (B) and is in fact not the agent of B then anything that A agrees with C is not binding on B unless ratified by B. C's remedy is to sue A for breach of warranty of authority.

                            If A is the agent of B then:

                            (a) anything that B authorises A to do, A may do and if he does is it B is bound by it;

                            but also,

                            (b) anything A does without B's authority or even if B expressly forbids it, will bind B if it is the sort of thing that comes within A's ostensible authority. If A is a letting agent then A's ostensible authority extends to signing a tenancy agreement or otherwise creating a tenancy because that is the sort of thing that letting agents do. C is not put on enquiry as to what precise authority A has. If B is aggrieved by any action that A does on his behalf without express or implied authority then B's remedy is to sue A.
                            I can see where you are coming from here, however, having discussed this with the agent, who has confirmed that my email was not shown or copied to the applicant/third party. We only need to be concerned with the law of agency if there is an issue as to whether the agent has gone beyond my instructions.

                            The agent has confirmed that he has only carried out my instructions, that is, to proceed with the application i.e contact the scheme operator to request they send the AST agreements for my perusal and signature. No copies of the AST agreement were sent to the agent.

                            As mentioned earlier the applicant is only relying on what they believe to be a binding acceptance as mentioned in my email as quoted in earlier posts which only states "Please proceed with X application". There is nothing else in writing, including a holding deposit agreement.

                            They say they have spoken to a solicitor who, according to the applicant, has advised that I have made a 'promise' and they say I should honour it or they will take it to Court. One would think they would be wise to spend their time finding alternative accommodation.

                            Comment


                            • #15
                              Originally posted by betteroffer View Post
                              They say they have spoken to a solicitor who, according to the applicant, has advised that I have made a 'promise' and they say I should honour it or they will take it to Court. One would think they would be wise to spend their time finding alternative accommodation.
                              Sounds like a possible 'professional' tenant, i.e. out to milk the system from every angle. I'd say you've had a lucky escape, and assuming the agent is telling the truth I can't see that the would-be tenant has any grounds to claim.

                              BTW I wouldn't trust the 'scheme's' tenant checks. If ever a similar situation arises, get your own checks done.

                              Comment

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