Legal query re being a landlord

[Gazza77]

Something just brought to my attention which is puzzling me, so I'll open it up to you all for answers....

I currently rent my old house out, using an estate agent's fully managed service. This means that they collect rent from the tenant, deduct their fees, and pay the balance to me.

If the estate agent go into administration, where do I stand as a creditor? Is my contract with the estate agent or the tenant, and does that mean if I wasn't paid that legally it is the tenant that has lost their rent or me?

Interesting question as my parents were wondering the same, as their tenants pay quarterly. Don't know the answer myself, but I would have thought that it lies with the agent, as AFAIK the tenants sign a contract with the agent, not the landlord.

[Drew Carey]

Hiya mate, I'm not a legal bod or anything but I do have a mate who rents a number of properties out through an agent.

His view is that if they wnet into administration you need to get in contact with the tennant and ensure they pay no further money to the agency but to you direct. He also suggested that the tenant provide details of all payments made to the agent so that you can match off against the payments recieved.

In regards to the money owed to you, he has said that you would be classed as a creditor and would need to submit a claim, this is where the records of tenants paid amounts against those recieved are needed. Also, within the T&C's of the agency agreement it should state whether any monies owed are paid into a secure account or not. If it states that it is paid into a seperate secure account then it should be safe.

As mentioned, no expert but thought i'd ask him as he has been doing this for years, but a lot seems to depend on the contract.

[Spiderman]

Your contract is with your tennant and the Agency only collect the money on your behalf and pass it on.

However if you are worried that they may go under then i would suggest asking your tennant to set up a direct debit to your account and bypass the Agency. they may still chagre the same fee however but you have to wiegh up how much you'd loose if a couple of months rent went missing against how much you're paying the agent for their service.

HTH

Originally Posted by Spiderman

Your contract is with your tennant and the Agency only collect the money on your behalf and pass it on.

True oh king. So, that makes the agency your agent and not the tenant's agent.

Therefore as they are your agent, the credit risk is yours - and not the tenant's.

If the rent is paid into a trust account or a client account at the agency then your money should be safe, but the question is - is it paid into such an account in the first place.

Ed

[Drew Carey]

Originally Posted by Ed

trust account or a client accountp>
Ed

Thats what I was trying to say, but for some reason "secure account" came out. Doh.

[Gazza77]

Originally Posted by Ed

True oh king. So, that makes the agency your agent and not the tenant's agent.

Therefore as they are your agent, the credit risk is yours - and not the tenant's.

If the rent is paid into a trust account or a client account at the agency then your money should be safe, but the question is - is it paid into such an account in the first place.

Ed

Only one month left on the tenancy, so I'm not too worried. Am doing a px with my sister however (long story!) and intend to rent that out, so something to consider next time...

Originally Posted by Gazza77

Only one month left on the tenancy, so I'm not too worried. Am doing a px with my sister however (long story!) and intend to rent that out, so something to consider next time...

We do a lot of land transactions here and we're very reasonably priced y'know *flagrant plug for work*

if they go down you take the hit

i had a holiday place the estate agent went under with a full seasons bookings up front had to let them holiday there since they had paid but i got 1% of the cash owed after 2 years

[Spiderman]

Originally Posted by Ed

We do a lot of land transactions here and we're very reasonably priced y'know *flagrant plug for work*

And hes a thoroughly nice dude too

And no i'm not on commision before you ask.