Agent taking fees off deposit, amongst other things

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Agent taking fees off deposit, amongst other things

    To cut a painful story short: we've had a tenant who didn't pay the rent and we successfully evicted with a Section 21. They still owe us over £5k in rent which we are pursuing separately, but the amount of damage to the property exceeded the deposit held.

    The Tenancy Agreement stated the amount of deposit held and was signed by all parties. We have been repaid what was left of the deposit for the damage, but were short about £1100. I asked for a breakdown and (amongst uncontested charges) it included their administration charges for sending out rent arrears letters and more significantly the amount they said that comprised the deposit was less than stated on the agreement because it (SLA) "was badly worded". They have given no other proof of what was taken from the tenants by way of deposit and we have a signed agreement stating the amount.

    I feel that if we take them to court, a signed Agreement with the stated amount is unarguable. (one hopes). However, the deposit is primarily for damage and since it didn't cover all the damage, then the agent can go and do what we did and sue the ex-tenant themselves. I do not and cannot believe that they are entitled to take their fees off the deposit when it has so clearly not covered its primary purpose.

    The latter amount is not as significant as the discrepancy in what the Agreement says they took as deposit and what they are now saying they took as the deposit. However, I feel that it is a very clear case of signed contracts are what matters, but as a matter of principal I want to fight them on taking their fees off. They can jolly well go through the legal processes too !

    I would appreciate any thoughts or advice!

  • #2
    In suing T for debt, Agent must have had your authority.
    The claim should have sought payment (by T) of not only the rent etc. but also the legal fees and Court costs. You won, so why are you being debited the fees which should have been recovered from T?
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

    Comment


    • #3
      Sorry, I didn't make myself clear. The Agent stated they had collected a deposit amounting to 3 months rent. That is in the Tenancy Agreement. They actually collected 2 months rent. They are saying the loss is our problem, not theirs. I think otherwise, because the 3 months is what is stated in the Agreement.

      The rent arrears is a different matter and we are currently waiting for court bailiffs to go in.

      Comment


      • #4
        No.
        Agency Agreement is between you (as L) and agent.
        Tenancy Agreement is between you and T.
        Keep this distinction in mind. Agent is not party to (nor involved in) Tenancy Agreement. However, Agent has not complied with Agency Agreemennt (failure to collect full deposit) so that can scarcely be your fault!
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

        Comment


        • #5
          Thanks very much for your replies. I must be more accurate about which agreement - especially when filling out the court papers !

          The Tenancy Agreement stipulates how the Security Deposit will be dealt with. The first clause is about damage and compensation for damage. Clause 5 mentions unpaid rent and agent administration fees. The deposit (even with the right amount collected) does not cover the damages. Is the Agent right to deduct their administration costs and leave us short on the damages?

          Comment


          • #6
            Agent does have right to set-off, i.e. to deduct:
            a. what you owe Agent; from
            b. what Agent owes you.

            The point is what Agent should have collected on your behalf (and, if not all collected, why not).
            JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
            1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
            2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
            3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
            4. *- Contact info: click on my name (blue-highlight link).

            Comment


            • #7
              Okay.

              Thanks very much for that.

              Comment


              • #8
                I just wonder why agent can set off against the deposit because they certainly cannot deduct commission from it if they are "regulated" This comes up time & again at NAEA as agents are in breach of Rule 1(3) of NAEA's Rules of Conduct if they deduct anything from the deposit concerning any of their fees or other costs without due authority.
                The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

                Comment


                • #9
                  It's the "due authority" bit that is critical. If L authorises (whether explicitly or in Terms of Engagement) Agent to make such deduction, it's OK.
                  JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                  1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                  2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                  3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                  4. *- Contact info: click on my name (blue-highlight link).

                  Comment


                  • #10
                    Sorry! I should clarify - a regulated agent cannot deduct fees from tenants deposits even if authorised by the landlord - it's in the ROC.
                    The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

                    Comment


                    • #11
                      This is a regulated agent: ARLA.

                      The fees they have taken are for sending out rent arrears letter, whose payment is the responsibility of the tenant sure, but the deposit didn't cover all the damage to the property let alone enough to pay the agent's fees.

                      So at the end of the day, the agent sits pretty and isn't out of pocket (except lost commission on the rent), but leaves us even more out of pocket as to the damage to the property which is surely the primary function of the security deposit?
                      Last edited by Granola; 13-02-2008, 18:43 PM. Reason: to clarify

                      Comment

                      Latest Activity

                      Collapse

                      • what is current requirements for smoke alarm?
                        daxu
                        Hi,
                        I have a one bed flat that is let out at the moment. I asked an electrician to change the fusebox to a consumer unit and asked him for a cost of changing my battery smoke alarm to a main conntected one.

                        What he told me is that I need two alarms, one smoke alarm and one heat alarm...
                        21-07-2017, 10:02 AM
                      • Reply to what is current requirements for smoke alarm?
                        jpkeates
                        The electrician is quoting the wrong requirements, as per Mr Shed above.

                        You need a Carbon Monoxide/Smoke detector unless there's an open fire.
                        Heat detectors are a requirement in a kitchen in an HMO.

                        You need to test the alarm on the first day of the tenancy and agree...
                        21-07-2017, 10:37 AM
                      • Claiming for protected deposit
                        mandm
                        This is an interesting one, got me into a spin.
                        Tenants signed AST but decided to leave after 6 months and 3 days (problem with moving) using the break clause in the AST. I protected the deposit using DPS (Insured) and returned the deposit minus deductions when the moved out.
                        I served the...
                        21-07-2017, 08:00 AM
                      • Reply to Claiming for protected deposit
                        theartfullodger
                        You don't mention PI so should we assume you can't prove you served it?...
                        21-07-2017, 10:35 AM
                      • Reply to Claiming for protected deposit
                        jpkeates
                        I don't think the solicitor is chancing their arm or that the allegation is false.
                        The tenant has identified that you didn't give them the prescribed information and the solicitor is acting on that.

                        The penalty is likely to be on the low side (1 x the deposit perhaps - even though...
                        21-07-2017, 10:35 AM
                      • Reply to what is current requirements for smoke alarm?
                        MrShed
                        What a load of rubbish this sparky is spinning to you!!

                        A single battery operated smoke alarm on a single floor is absolutely fine.
                        21-07-2017, 10:23 AM
                      • Reply to Claiming for protected deposit
                        MrShed
                        To be fair, allowing DPS to send the email is even worse, as this doesnt help you prove that they received it.

                        In fairness it doesnt sound like you did in fact give them the prescribed information...
                        21-07-2017, 10:18 AM
                      • Reply to Claiming for protected deposit
                        mandm
                        Thanks Guys for your immediate response, i will write and will attach the confirmation email from the DPS to the solicitor.
                        @AndrewDod I did not send them email, DPS did, i also asked them to post the confirmation to tenants but they said due to DPA, tenants needs to request that!
                        Is there...
                        21-07-2017, 10:03 AM
                      • Discussion - GDPR and implications on landlords
                        MrShed
                        I've just posted something on GDPR and then wondered whether it had been discussed on here before - a quick search implies its never been mentioned.

                        I thought I would raise a topic to discuss it and the implications on landlords.In effect this is a replacement of the Data Protection Act...
                        20-07-2017, 15:01 PM
                      • Reply to Discussion - GDPR and implications on landlords
                        MrShed
                        Depends on the storage provider. The other problem is though that in a disaster recovery position, they usually fail this to somewhere else, out of EU - which puts you in breach
                        21-07-2017, 09:50 AM
                      Working...
                      X