do I have to pay the credit check fees back to Tenant?

[stanbrl1]

I have a Tenant who is very much in arrears with rent and now her HB has been reduced she informed me she was leaving and was going for a council property as she can't afford the rent. We agreed that she would move out at the end of the month and if need be would stay with her sister and claim homeless status. I advertised my house, did viewings, found a suitable Tenant through an agent. The new Tenant paid £160 credit check fees to the agent and although she failed she did pass with a guarantor. My present tenant has now declared that she is not going anywhere until the council give her a house! I now have to go through eviction proceedings as she is now 3 months in arrears. Meanwhile the new Tenant who of course can now not move in has found another house and wants me to pay her the £160 back. I do think it's unfair that she should lose out and have said I will pay when I get some rent which the HB owe me. She is demanding that I pay immediately but I simply don't have it right now. Am I liable for this money or should I take it up with the agent who charged the fee.

[LesleyAnne]

Did original tenant give you written notice that she was going to move out? Verbal confirmation that she was going to live with family is not a valid notice to quit and cannot be relied on to ensure property will be vacant for another tenant. You should have insisted on notice in writing, or waited until tenant actually left.

You have therefore taken fees from the new tenants on a proprety that you could not provide them, so you are liable to return the fees you have charged. The agent has provided the credit check service on the tenants at your request, so they are not liable to return any fees on your behalf.

If you placed an order for an item and paid for it, then supplier could not deliver, you would expect a prompt refund wouldn't you?

The fact that you do not have the money to return the fees is not the tenant's concern. Indeed, if you cannot find £160 to pay these fees back, how would you cope if there was a major repair bill on your property - for instance, you cannot just tell the tenant that they will have to live without heating or hot water because you don't have the money to cover a boiler repair.

It is not uncommon for council to tell tenants to sit out the full eviction process before they will offer them housing, as leaving voluntarily is making themselves homeless and council has no obligation to provide them a property unless you evict. If tenant is 2 months or more rent owing, issue Section 8 notice, followed up by Section 21 (assuming deposit correctly protected), and start the process to evict and get your rent arrears back.

[LesleyAnne]

I assume this is your tenant:

http://www.landlordzone.co.uk/forums...-paying-tenant

and I see from this you have not protected deposit, so serving a valid Section 21 is not an option until you return it to the tenant in full.

Section 8 is unaffected by the lack of deposit protection, but failing to protect it does leave you open to a possible claim from the tenant for 1-3x the deposit value (even if you return the deposit to them now). So not only do you have to pay back the new tenant's credit check fees, but also the existing tenant can sue you aswell. Me thinks you need to do a lot more research into the obligations of being a LL before you let this property again!

[mind the gap]

I agree.

And yes, you are liable to repay the disappointed T's checking fees. These can however only be enforced by a court, in then end.

[westminster]

Pay the money back to the so-called prospective new tenant. The agent acts purely on your instructions.

[Alexlandlord]

whilst agent acted on your instructions £160 for a credit check is very high. The mark up on these checks is getting worse, you can do your own via same source many agents use for less than £30. Remember that for the future,. also if you have no money the disappointed tenant will have to wait. You need a reasonable margin to rent properties this situation could rear its head again if unexpected repairs are required, consider selling when tenant eventually goes or reducing costs, online agents will find you a tenant for Around £80 I use them all the time.