Estate agents want cash for full deposit and first month's rent - dodgy?

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    Estate agents want cash for full deposit and first month's rent - dodgy?

    Dear wise forum users,

    We found a house we liked and the verbal offer was accepted, so the letting agent asked me to come in with various documents and pay £500 up front in cash.

    I assumed this was mostly part of the deposit etc, and that perhaps the cash was because the area had been the victim of many bouncing cheques in the past. I'm sure the asked for figure was only £300 3 yrs ago - is £500 standard?

    Anyway, £500 was alright I thought. They gave me a receipt (I thought they gave me two, but I got home to find only one) - and only now do I see that nowhere on this receipt does it say who I've paid this £500 in cash to, which is a little worrying.

    But more odd is that they've claimed the person in their agency that manages the bank accounts is away for 3 weeks, so they have to do everything by cash. They asked me to bring £3000 or so in to cover the rest of the deposit/rent etc (apparently £500 doesn't even cover all the standard fees these days...?) I said only if they came with me into the bank and gave me the receipt there and then would I consider such a thing.

    Have got home, looked at this dodgy receipt and spoken to relatives and am getting worried. Should I be? From reading about the subject I might even have to pay bank charges to exchange so much cash.

    Additional information:
    We have met the landlords of the property and know where they live (next door to the place we plan to rent) and they seem very nice and genuine. I don't know their exact names but I could pay them a visit - is that legal?
    I offered to pay the money direct, online, to the landlords, who will be managing the property anyway. The estate agent still wanted cash.
    This estate agent is right on the high street, opposite a macdonalds. They have, years ago, managed properties owned by my in-laws. DIdn't have reason to be suspicious until today.

    Once again I am very grateful for any of your advice/help. I do try looking for where a similar question might have been asked in the past. Sorry if anyone has to repeat themselves.

    #2
    I would share your concerns.

    The tenant fees you are being charged (£500+) seems steep.

    I would find the owners name (land registry website - £4) and contact them. Explain that you are concerned (and why). Ask if you can deal directly with the landlord.

    Is the agency well known? Is it a member of ARLA?
    If it is a limited company, you can get an idea of its financial status by putting the name in http://companycheck.co.uk/

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      #3
      Originally posted by Clay-Baker View Post
      We have met the landlords of the property and know where they live (next door to the place we plan to rent) and they seem very nice and genuine. I don't know their exact names but I could pay them a visit - is that legal?
      Of course it's legal. And it would be the quickest way of letting them know what their agents are up to. I bet they are charging them over the odds for a tenant find, as well.
      'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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        #4
        Clay-Baker - you don't say when your move in date is.

        The reason a lot of agents ask for cash is that it is 'cleared funds' and when you are about to sign a tenancy agreement that is vital. Banks and building societies are notorious at 'losing' money for a few days.

        It is inappropriate to contact the landlord direct - he has used an agency for a reason - respect that. The landlord has a contract with the agent and you have no idea what is it it - do you? Is it any of your business? NO.

        Do the checks MTG suggests for your own peace of mind.



        Freedom at the point of zero............

        Comment


          #5
          A bankers draft made payable to the agency? They cost between £10 and £25, not a lot for peace of mind. If they say it's to transfer to the owner, get one in their name.

          Meet at their bank? I am sure they have the account details for counter credits.

          Early in my career one partner was on leave, and the other taken very ill and "the trainee" was in charge! Bankers draft were a solution then as much as now.

          It's also a lot safer for the agency staff not to have a lot of cash floating around.
          Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

          Comment


            #6
            Dear all,

            Thanks so much for your input. I wanted to post after this was all resolved as things have started to look more positive. However, need to as for wisdom concerning deposit issues with my previous Landlord and feel I at least owe it to you to shed some light on developments with the new place first.

            Regarding paying the deposit/first month's rent:
            We kicked up a fuss and they said the member of staff going on leave wasn't doing so for a week so if I transferred early enough it would work. My bank said the funds would clear in 2 hours so we waited until we'd signed the tenancy agreement and then did the transfer. We've heard nothing negative since (only good things) so assume that's all gone alright. That was over a week ago now.

            Regarding the receipt: I asked for a scanned copy of the receipt and they emailed one (complete with my signature agreeing to their high agent fees...)

            Regarding the high fees: An estate agent we worked with before (from a high street well established non-Foxtons company) said that these smaller agencies often made high charges. Only one of you seems to have commented that the charge was high.
            Another local, small agency said they charged one week's rent for a fee. If that didn't include the referencing then that would probably end up similarly high (the £500+ includes the referencing and all costs that aren't going towards rent or deposit). A different agent quoted a much lower cost, though I never saw their office and found those ones through gumtree.

            Regarding the move in date: Has been delayed to start of next week, by a week, because some items hadn't arrived (blinds etc). That was fine with us.

            Regarding ARLA: No! Which caused me to panic, until things started moving in the right direction again
            I'm assuming they aren't a limited company either as I could not find on registry.

            Regarding bankers drafts: They remained against this the whole time, though that problem has been resolved (see above).

            Regarding the cash issue: Relatives of mine say they've paid with cash for some big transactions. However, it still seems a bit weird, especially with government emphasis on stopping that kind of thing these days. Don't want to get hung from the bridge as an example of what not to do etc.

            Regarding contacting landlords: Have not done since things moved in right direction.

            Thanks again for all your input and will hopefully have more good news soon. I feel like there are varying sympathies among you for tenants and I wonder what your situations are (maybe they're on your profiles). Regardless, I'm very impressed with the fast response times. Very many thanks.

            Comment


              #7
              Glad to hear things are progressing to your satisfaction.

              Regular contributors to the Forum tend to be LLs with other day jobs, (eg lawyers, leting agents, some are even tenants AND LLs) that have experienced the full spectrum of Ts, LLs & LAs at some time.
              LA fees are a contractual matter between LA & prospective Ts.
              £500 may be too high for North East End but not for Central London. Basically a LA (broker) can ask for whatever fee he fels is appropriate, the prospective T has option to pay, negotiate or walk away.
              Many LA's (& LLs) require initial payments in cash (cleared funds) before haning over keys etc. It can also be used to assess Ts ability to meet future committments, if fees not too onerous.
              There are unscrupulous LLs/LAs & Ts so the adage of Buyer/Provider Beware is well-founded, as the other adage 'My word is my Bond' or a handshake to seal the deal has lost credibility in Court before negotiation in Rip Off Britain.

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