AST signed for let from July 2013. Do we have to pay deposit now?

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  • #46
    Yes, I am following your advice, I am keeping dates & times and detailed notes of phone calls plus copies of emails and letters that I have sent. Also, I am saving my phone records which show the calls to the LA number.

    I believe that I may have found the leverage that I need Well, hopefully!

    Two things:

    1) I realise that I may have forgotten (doh!) amongst all the details I have given to mention another important fact which is that the director of the LA is a solicitor who had a 'control' placed on her three years ago relating to management of money. (This info is from the Solicitors Regulation Authority). It appears that she had to do some kind of training 'in the interest of the public' and then the 'control' was removed.

    2) Relating to the company status now being 'Active - proposal to strike of' - Looking at information I can find on this, if they have applied for this themselves then they should not have done this as they have been trading in the past 3 months. If, however, as seems more likely, Companies House have done this due to the overdue accounts then in 3 months the company could be dissolved by Companies House with assets going to the Crown. However, this strike off process can be halted by interested parties e.g. creditors, I believe, in which case the longer it remains active the greater the Companies House penalties accrued due to non submission of accounts (possibly) but, also, Corporation Tax will become due if it is kept active for 9 months and 1 day after the accounts were due - so Corporation Tax would be due (if applicable) in late August.

    More details of this here:

    http://www.cheapaccounting.co.uk/blo...rporation-tax/

    which is discussed here:

    http://www.ukbusinessforums.co.uk/fo...d.php?t=175493


    I am, therefore, thinking that a letter from the students along the following lines may be appropriate, although I will recommend they take appropriate advice from other sources and not just my suggestions as I don't want to bring upon them/us any further complications:


    Dear ......

    LETTER BEFORE ACTION

    With reference to;

    Proposed tenancy for ................... Road

    and

    Points raised in <me>'s letter of ...

    and

    The company status for <LA> now being 'Active - proposal to strike off' and may be dissolved in 3 months time - prior to the tenancy being executed.

    As you do not appear to have acted with due diligence nor responded in a timely manner to relevant communications, and as a result have not been able to conclude the contract for the above mentioned tenancy despite 2 months having passed since we signed the AST agreement, and for the reasons outlined in the above mentioned letter, we request the immediate return of the following:

    Rent deposit paid - details of amounts

    Referencing fees - details of amounts

    If these monies are not returned within 10 days we propose further action which may include but not be limited to:

    An application to Companies House to have the strike off suspended pending the return of monies due to us.

    An application to the small claims court for the return of the complete amount for the rent deposit paid.

    An application to the small claims court for the return of the complete amount for the referencing fees paid.

    An application to the small claims court for compensation for time spent trying to resolve the issue (I am self-employed) and distress caused to us (the students) during their examinations due to you not performing your duties as LA with due diligence.

    Yours sincerely,

    ..............



    Opinions appreciated, thank you!

    Comment


    • #47
      Just one point only.

      Forget Companies house. THEY strike off companies for failing to
      forward Annual returns, accounts, failing to pay fines and is
      automatic if violations of the rules continue.
      You as a complete stranger will not stop the process.
      If a company has broken the law, you cannot stop due process.

      This letting agent wont pay corporation tax, so forget that one too.

      If a firm wants to disapear, they just do. Tell everyone they ran out
      of money,went bust and shut down. Companies house cannot force
      anyone to keep open, who may only be a one director firm.

      Comment


      • #48
        Thanks, ram, for the forewarning - I won't expect too much from Companies House.

        Do you think the format of the letter is okay? - I picked up from other threads that 'Letter before action' is needed.

        What do you think the court costs involved will be for pursuing this line of action?

        Thanks again.

        Comment


        • #49
          Originally posted by TMC View Post
          I won't expect too much from Companies House.
          Format of the letter is okay?
          court costs involved .
          May I suggest someone else replies to this, as my views can be
          radical, condescending, but often they put the windup Leaseholders
          and agents andgets results, most of the time without the need for
          litigation.

          You are in a difficult possition legaly, as has been explained to you,
          but their inability to run a company, via their no response to you
          is a valid point, and I can't see a court dismissing your need to
          distance yourself from a potential letting agent in the throws of
          bankrupcy / stiking off, together with their illegal ?( in my view )
          stating that if the credit checks are not favourable, they will
          keep the deposit of £ 2000 +

          Many students will not pass a credit check, as either they owe too
          much money, or have no credit history at all, which means most
          WILL fail a credit check, and if all letting agents said- fail credit
          check, we keep your deposit, then then they will be losing out
          £ 2000 +_every time they apply for a tenancy.

          Court costs = dont contemplate.

          No matter what you write to the agents, they will be well versed
          in delaying tactics, as you have seen, and if the 5 / 6 students
          are now desparate for accommodation, your efforts will be in vane,
          and they will take the place despite your warnings.

          Your letter is they can't organise a P' up in a brewery.
          Cant' keeping deposit if they fail credit check.
          and other reasons mentioned.

          good luck with a sample letter that may come your way.

          R.a.M.

          Comment


          • #50
            Re the letter before action - but I thought they all want to proceed with the tenancy?

            There is no 'small claims court'. Small claims is one of the tracks to which county court claims are allocated, depending on the type of claim. If they were to claim damages for 'distress' it is likely the claim would not be allocated to small claims, in which case the court fees would be considerably higher, and they'd be exposed to the LL's legal costs if they lost.

            I also highly doubt you, personally, have any valid claim against the agent. You've chosen to get involved on behalf of your son.

            Really, it's an empty threat and the agent will know it's an empty threat.

            Also bear in mind that the tenancy contract is between the students and the landlord. If the agent company is struck off this will not have any effect on the tenancy contract.

            Call the council and find out about the HMO licence/safety requirements.

            You could also complain about the solicitor-agent to the SRA, and send them a copy of that receipt.

            Comment


            • #51
              You wouldn't have a claim against the agent as you arent a potential tenant and haven't suffered a loss. Your son may have a claim, however his only loss so far is the reference fee - he hasn't yet paid the deposit. In any event, would your son co-operate with a claim? Would the other students, who just want to move into the house? Are you prepared to pay the court costs yourself for the whole group, as this will be more than the deposit you are disputing.

              The agents, like it or not, have ignored you so far and will probably continue to do so.

              I think you are worrying unecessarily about failing the referencing - the agents just want the house filled with as little hassle as possible and it is obvious that a six bed house will only go to students who will fail standard referencing. They probably won't bother to reference them at all, PROVIDED they get guarantors on board, however I appreciate that the referencing costs are ridiculous.

              Have you really thought about the other five tenants who have been brought into this? If the tenancy doesnt go ahead they may well lose their deposit and even if the agents eventually refund it, there will be a considerable delay and in the meantime they may not be in a position (or their parents/guarantors may be unwilling)to fork out a second deposit on another house.

              Do you want your son spending the next academic year living alone because he has lost his friends over this?

              BTW, it is perfectly normal, for student properties, to ask for a deposit this far in advance.

              I understand you are concerned about the agents,however it is not obvious that the agents are going to run away with your money. Unfortunately, with most agents (and I have been at the receiving end) it is a case of take it or leave it, and you face the prospect of your son and his friends going through the same situation all over again if this house falls through.

              Have the other guarantors been informed of the current state of events?

              Dare I say it might be better for all concerned to bite the bullet, sign as guarantor, pay the deposit and hope for the best? It does appear to me that you are digging a deeper and deeper hole for yourself.

              (BTW, if this house only has two floors it will not be a licencable HMO).

              Comment


              • #52
                Once again, thank you for all your replies.

                I have checked with the council and they have said that at present it wouldn't need licensing. Additional licensing will be coming into force and will be rolled out from July.

                Regarding the other prospective tenants, their guarantors and my son's friendships and accommodation next year: these are VERY MUCH on my mind. I feel strongly about the fact that the students' relative lack of experience in these matters was taken advantage of by individuals who purported to be trustworthy professionals and that is what has led to this situation.

                Also, the other proposed guarantors received these documents but did not flag up the errors nor did they investigate further. They made a decision themselves to be agree to being guarantors.

                Perhaps, with hindsight, it would have been easier to just agree to it all - but I am completely straight with my customers, I fleece no-one and I go the extra mile to do my best for them, and I like this quote too, "All that is necessary for the triumph of evil is for good men to do nothing". Maybe over egging it a bit but hopefully you understand my sentiment. I feel a great sense of injustice over what is happening and the far reaching problems it is causing.

                To answer your question, westminster, I think the students, including my son, would all like to go ahead IF they feel they know they have a binding contract despite me not being guarantor.

                My very original post/question was:

                What is the status of this AST? How can we bring the situation to a conclusion?

                and that is still the crux of the problem, I feel.

                The students need to know one way or another:

                YES we accept you (despite one parent not being a guarantor) - here is a copy of the AST signed by the landlord and your deposits are in scheme XYZ. At which point it might be reasonable for my son to pay his part of the deposit – but without this indication of a binding contract there is a risk of losing more.

                or

                NO we are not accepting you - in which case the students will have to decide whether to try to reclaim the deposits taken. (My sample letter was intended as possibly coming from the other students - rather than me - although I realise that I had added bits referring to me which were inappropriate – and I certainly wouldn’t recommend they do it without taking appropriate advice) - if that's the route they want to take.

                I am now ‘out of the equation’ as a proposed guarantor but as a parent I will still doing my very best to help my son, AND his friends, in any way I can, in dealing with people who are very experienced in obfuscation and relieving vulnerable/inexperienced/trusting people of their money – but ultimately I appreciate that it is for my son and his friends to make the decision.

                However, can they make any reasoned decision without knowing from the agent what their position is? I appreciate earlier comments said that because of the mess made by the LA only a court would be able to decide if a binding contract has been made – but they are not in a position to take this to a court to decide. I feel they can only ask the LA where they stand and work with that, or, make a decision themselves on where they stand and then fight from that position - hence my suggested/proposed letter from the students in my earlier post.

                What can they do? They cannot wait until July 1st to find out – by which time the LA is likely to have been dissolved.

                Comment


                • #53
                  If we just put in a claim for return of the rent deposit (£1500) would that definitely just go to the small claims court.

                  What is the maximum fees we might incur?

                  Comment


                  • #54
                    Is this a reasonable letter to use if my son and his friends decide to go the route of reclaiming the deposits, as no proof of binding contract?

                    Dear ……………

                    LETTER BEFORE ACTION

                    With reference to:

                    • Proposed tenancy for …………………….

                    • Points raised in ……………'s letter of ... February 2013

                    • The company status for ………………………. now being 'Active - proposal to strike off' and may be dissolved in 3 months’ time - prior to the abovementioned tenancy being executed.

                    As you do not appear to have acted with due diligence, nor responded in a timely manner to relevant communications, and as a result have not been able to conclude the contract for the above mentioned tenancy despite 2 months having passed since we signed the AST agreement, and for the reasons outlined in the above mentioned letter, we request the immediate return of the following:

                    Rent deposit paid - details of amounts, by whom and bank details to go here


                    If these monies are not returned within 14 days we propose further action which may include but not be limited to:

                    • An application to Companies House to have the strike off suspended pending further actions and the return of monies due to us.

                    • Referral to the Legal Ombudsman

                    • An application to the court for the return of the complete amount for the rent deposits paid.

                    Yours sincerely,

                    Comment


                    • #55
                      Originally posted by TMC View Post
                      If we just put in a claim for return of the rent deposit (£1500) would that definitely just go to the small claims court.
                      Yes.

                      What is the maximum fees we might incur?
                      No more than £250.

                      Originally posted by TMC View Post

                      If these monies are not returned within 14 days we propose further action which may include but not be limited to:

                      • An application to Companies House to have the strike off suspended pending further actions and the return of monies due to us.

                      • Referral to the Legal Ombudsman

                      • An application to the court for the return of the complete amount for the rent deposits paid.

                      Yours sincerely,
                      1) Forget Companies House. 2) I think you mean the Property Ombudsman. I would pitch it as a threat of county court action only. There's an air of bluster with the other stuff which may serve to undermine the genuine threat of legal action, i.e. they might take you less seriously.

                      Also, as I've said before, if the agent is struck off before the tenancy starts this has no bearing on the validity of the contract possibly agreed between students and LL. The agent is acting on behalf of the LL, and may grant a tenancy on behalf of the LL or receive payments on behalf of the LL but he is not the LL. He may disappear, but the parties to the possible contract remain.

                      Ideally, everyone should be on board with the letter/approach. It really doesn't sound as if they are. But you could still write, making it clear that it is on behalf of your son, one of the prospective tenants. If so, you would not be demanding a refund, as your son has only paid a non-refundable referencing fee, AFAIK.

                      The situation is beyond my general experience/knowledge, but if you will not seek professional legal advice, then here's my penny's worth...

                      I think that if you/the students write to the agent asking for firm confirmation either way then it might be the case that, if the agent fails to respond by a given deadline, then you would be entitled to proceed on the basis that no contract has been concluded. I think this because it seems reasonable in the circumstances, and I think it is not reasonable for a party to a possible contract to fail to confirm his position following a very reasonable request.

                      I can certainly do no harm to write such a letter.

                      I have asked Lawcruncher to take a look at this thread, as he is much better qualified to advise you. But no idea when he might next log in.

                      Comment


                      • #56
                        Thank you westminster.

                        I am feeling more hopeful that it may all become clearer soon.

                        I am meeting my son tomorrow to tell him as much as I can about what I have learnt from this forum (which is a lot - thank you all!).

                        Then he is then going to meet his friends to discuss the situation with them.

                        I have put together a list of pros and cons for each possible outcome for them to consider.

                        I realise that it is for my son and his friends to make a decision as a group and that his friends have more to lose as they paid their portions of the deposit.

                        If they want to go ahead I will suggest to them your idea of a letter requiring confirmation of the situation from the agent.

                        If they want to withdraw and get the deposits returned I will suggest my letter, amended as you suggest.

                        If they decide to go ahead then I guess at some stage they need to start dealing with the landlord directly.

                        That is, of course, presuming that they can reach a decision/agreement.

                        Also, regarding Companies House, as quite a few students could be affected and probably lose money if/when the company is struck off, do you think the university could make an application to Companies House to suspend the strike off until monies are reclaimed? Who would be successful at preventing strike off?

                        Thank you :-)

                        Comment


                        • #57
                          Originally posted by TMC View Post
                          Also, regarding Companies House, as quite a few students could be affected and probably lose money if/when the company is struck off, do you think the university could make an application to Companies House to suspend the strike off until monies are reclaimed? Who would be successful at preventing strike off?
                          Cannot advise re strike off, but I don't see what the university has to do with it.

                          However, you say

                          "the AST agreement says,"A deposit of £2250 is payable on signing this agreement. The tenant pays the deposit as security for the performance of the tenants obligations....etc"

                          and, as I said, the tenancy contract is between LL and T, not agent and T. The agent has taken the deposit money on behalf of the LL. Any claim for a refund of the deposit should be made against the LL.

                          Comment


                          • #58
                            Originally posted by TMC View Post
                            do you think the university could make an application to Companies House to
                            suspend the strike off until monies are reclaimed?
                            PLEASE, you have been told 3, if not 4 times to forget Companies
                            house.
                            ONLY the firm can pay the fines, or adhere to the law to prevent
                            being struck off.
                            Companies house is just a data recording company, not a court,
                            they just record what a firm does, and to ensure a company follows
                            the laws, all they do is fine for late receipt of information.

                            They have to obey their own laws. No accounts submitted within
                            the time frame, they fine, if fine not paid, they quadruple the fine,
                            but advise you they will strike you off if accounts / or whatever
                            are not submitted in a certian time frame, and after that, they will
                            be stuck off.

                            I know you are trying to "get them" via any means possible, but via
                            Companies house is a "none starter".

                            R.a.M.

                            Comment


                            • #59
                              Hi thanks again for responses.

                              Yes, thanks westminster, I am clearer now about LA acting for LL so any claim will need to be against LL and that I need not worry so much about LA disappearing overnight (with regard to the other students deposits).

                              And, ram, I promise not to mention Companies House again ;-) Your explanation of how they work makes it clearer as to why they are a 'none starter', thanks.

                              I know I am like a 'dog with a bone' over this - I want to help resolve things for my son and his friends and, also, if in doing so I can prevent any other students and their families from having to deal with these issues then I might just feel that all the stress has been worthwhile. It has been going on for 6 weeks and hung over us like a black cloud - perhaps in a way that seems out of proportion to those dealing with these issues on a daily basis.

                              I feel as though I have spent these past few weeks taking a correspondence course in Landlord and Tenant Law.

                              Joking aside, I don't know where we would be without your advice and explanations, and that you have stuck with me through this saga and noted all the relevant details - really appreciated, and, once again, thank you.

                              Comment


                              • #60
                                I was asked to comment on this. Has the problem been resolved?

                                Comment

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