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Advice please: Being ripped off by Lettings Agent

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Author Topic: Advice please: Being ripped off by Lettings Agent  (Read 330 times)
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« on: October 27, 2021, 02:26:43 PM »

Hello, newbie here, so please be gentle with me!

I’m a landlord of one small flat that I used to live in, and am wondering if anyone here could give me some advice on a problem I have found myself with today, whereby a lettings agent (LA) is trying to go back on an agreement we had made when I began a new tenancy with them last year.

Having had LAs in the past try to charge me fees for however long the tenants are there for, I had always negotiated that I would pay lettings fees (tenants finder-fees) for the first year and then not after that, as they’re not doing anything after the initial 12 months to justify them, and this has always been agreed.  My last tenant stayed 10 years, so I’m glad that I had done that.

This time, however, I was in a long void after she moved out and the agent I’d always used was failing to find any prospective tenants (this was between Aug 2020 and March 2021, so peak-Covid), and so I eventually went to another agent to try them as well.

They did find me tenants, which was a relief, as my flat had been empty for 7 months (part of which time I had refurbished the property), and the tenants wanted a 24-month tenancy, which was fine.

I also decided, for the first time ever, to go with the agents’ Fully Managed service this time, as, being Covid times, I was worried about rules/laws changing all the time and I didn’t want to come unstuck with technicalities of anything I might miss, so it made sense in this case.

I negotiated a fee of 10%+VAT lettings fees, with free Managed service for the first year, and then if I decided to keep Managed, I would negotiate a fee for that with them, up to 6%, depending on how I felt about their service.

I also had it agreed with them that if I chose to discontinue the Managed service after Year 1, I would not be paying Lettings fees beyond Year 1, whether or not the tenants remained.

This was agreed (or so I thought) and I amended the Terms of Business (ToB) doc to reflect this, so where it said that I would pay fees for “the duration of the tenancy” (in this case 24 months), I added a caveat of “Up to 12 months” and the clause that:

“It is agreed that if the Landlord opts to discontinue Management Services in year 2 (with appropriate Notice Period), and Tenants remain in-situ, then no Lettings or Renewal Fee will be requested or charged to the Landlord.”.

So, all unambiguous then, or so I thought.

I also struck-through a paragraph in the small print saying again that I would pay lettings fees for the entire duration of the tenancy (up to a max of 3 years).

These amendments to the ToB were accepted by the agent and the document was duly signed.

The Management service was absolutely appalling and beyond a joke and there is no way I want to continue with it longer than I absolutely have to, and so I notified the agents last week that I would be cancelling it for Year 2 of the tenancy, giving them more than the 3 months notice required.

I also reminded them that as per our agreement, I would not be paying Lettings fees in Year 2 of the tenancy, having ceased the Managed service.

However, yesterday, I got an email from them to say that Lettings Fees are for the duration of the tenancy, and that as this tenancy contract is 24 months, I will owe them the 10%+VAT fees for the remaining 17 months.

I hoped this was an oversight by the Managing agent who maybe didn’t know about the agreement I’d made with the Lettings agent and hadn’t read the part of the ToB that states the caveats above, so I reminded her of this, copying in the Lettings agent.

Lettings agent gets back to me today telling me that we did agree that I wouldn’t pay fees in Year 2, however, in this case, “Year 2” means after the end of the contracted tenancy of 24 months if the tenants stay on, (ie, Year 3!) and so I have to pay fees for the entire duration of that tenancy contract of 24 months!

This seems ludicrous to me.  Year 2 obviously means the SECOND year of the tenancy, ie months 13-24 and as such, the agreement is that I do not pay lettings fees for that second year.

He’s making out that Year 2 means the year after month 24, which is utterly ridiculous.

The amount of money involved is not insignificant, but although it wouldn’t bankrupt me, I want to fight this as he is clearly trying to get out of an agreement that we made and which was very clear, on a technicality of what “Year 2” may or may not mean.


I’m really stressed about it and don’t want to go wading in with more arguments without some advice first, so if anyone is willing to discuss this with me and give me a bit of help/advice with whether they can do this, I’d be extremely grateful.


Many thanks in advance,

Matt
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« Reply #1 on: October 27, 2021, 05:14:10 PM »

One wonders why you need to fight it? A person cannot redefine the meaning of the word "year" as they see fit.

A year is a year, it's not a debatable term... whether it's calendar year, financial year, school year... it's always a year. It's never 24 months.

That would be something else entirely... it'd be 2 years. In times like this I think it's useful to fall back to what was the intention behind the changes... it's pretty obvious what your intention was. And you thought you'd got that. As to the Agent's intention... one can only assume that it was to cynically hoodwink you?

Is it somewhat reassuring to see Agents living up to their reputation.
« Last Edit: October 27, 2021, 05:15:49 PM by Hippogriff »
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« Reply #2 on: October 27, 2021, 05:25:45 PM »

Hi Hippogriff,

Many thanks for your response.

Yes, I agree it should be indisputable that Year 2 means the second year, and not some time AFTER the 2 years.

I was posting the question initially because it seems the agent thinks this is a technicality they can use so I wanted to ask whether there is indeed some way that they are right, but as you say, it is very clear what it means and what my intentions behind it were.

I have tried today, calling the NRLA, the Ombudmsan, the PRS and Landlord Action, none of who were able or willing to help at all.

I'll see what my response to the agent pointing out the clear meaning of a "year" brings.

Thanks again, M
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« Reply #3 on: October 27, 2021, 06:57:12 PM »

Presumably the tenant pays the rent to the agent?
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« Reply #4 on: October 27, 2021, 07:15:43 PM »

Hi Heavy Karma,

Yes, because I have the agent's (appalling) Fully Managed service this year, the rent is paid to them and they send it to me, minus Lettings fees of 10%+VAT and any maintenance costs.

The next rent is due on 1st Nov and the agent have indicated that because they've decided I owe them another 17 months fees (despite our agreement and because they've decided on a new meaning for the term "Year 2"), they will take the whole of Nov's rent and bill me for the rest.

 :-[
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« Reply #5 on: October 27, 2021, 07:52:53 PM »

Possession is nine-tenths of the law...

I would be intervening before it happens, not chasing it up with someone who doesn't care after it's in their hands.

Just saying.
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« Reply #6 on: October 27, 2021, 08:01:26 PM »

Sorry, Hippo, I'm not sure what you mean..?

Am I entitled to tell the agents that they are not allowed to take a whole month's rent from me until the matter is resolved, or am I even entitled to ask my tenants to pay it straight to me next week?
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« Reply #7 on: October 27, 2021, 09:50:34 PM »

Once it's in their hands, the chances of you retrieving it seem slim to me.

I don't know if you have a relationship with your Tenants... but, if you do not, now might be the time to open one up and tell them you've - effectively - fired the Agent, effective immediately. Be kind to them, it's extra admin. on their side to change bank details etc.. - but this is really hard if you have no relationship with them at all. I mean, if I was a Tenant and some bloke turned up at my door, asking for rent money... I'd tell him to sod off.

Once the Agent is billing you, that's easy to ignore... or fight from a position of power. If they're just taking the money that they want to, before you even see it, what can you do? The tail is wagging the dog here.
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« Reply #8 on: October 27, 2021, 09:51:26 PM »

Am I entitled to tell the agents that they are not allowed to take a whole month's rent from me until the matter is resolved...

Based on their current MO do you think this will have an effect? If so, go that route.
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« Reply #9 on: October 28, 2021, 09:20:06 AM »

I think you already have enough proof that they are going to shaft you unless you fight back. I would immediately contact the tenants and explain the situation. Ask them nicely to change their standing order to your account.You may find they are not very happy with the agents either and will co-operate. Apologise for inconvenience.If they waver,you could offer a small reduction in rent or a nice voucher as you won't be paying agent fees.Act quickly and effectively.
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« Reply #10 on: October 28, 2021, 01:52:45 PM »

Hello. Thanks for your reply. I had thought of doing that but wondered if it might be illegal to get the tenants to pay me the next rent directly as technically the agents aren't cancelling the Managed service until the 1st Nov, which is the day rent is paid.

So I thought maybe if I did that, I'd be breaking a contract or something (although yes I know they are too, but anything I do that might be illegal won't help my case).
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« Reply #11 on: October 28, 2021, 03:37:10 PM »

In the real world,you don't really have "a case",if by that you mean you could sue them,or they will sue you.If it makes you feel better,wait until the November payment is done,then act.They have lost any rights to have their agreement with you honoured.
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« Reply #12 on: October 28, 2021, 04:01:38 PM »

Thanks, Heavy,

Yes, I don't think I should swoop in with 2 days to spare and try to get my tenants to divert their rent straight to me, as I think that might be seen as being a bit illegal on my part.

Also, it's unfair to the tenants to suddenly be put in that position by a landlord they've never met, and possible getting them into trouble for breaking any agreement they have with the agents.

I've written back to the agent, detailing the terms of the agreement we have, illustrated with screengrabs of emails and the contract where these terms are clearly stated, so I'm hoping they will realise they won't have much of a leg to stand on, but I  wouldn't be at all surprised if they pursue it further.

I've also initiated a complaint using the Winkworth Dispute Procedure, direct to the manager of that branch, as is says I should, so I'll see if/how he responds.

He's been copied in to the correspondence so far so it's a little disappointing that he hasn't as yet stepped to try to resolve this.  He obviously thinks they're in the right over this.

Bah!!
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« Reply #13 on: November 11, 2021, 11:12:43 AM »

Im curious, do you have any update on what happened?
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« Reply #14 on: November 11, 2021, 03:23:28 PM »

Hi Dragon,

Well....  I managed to find a solicitor who specialises in this sort of thing, and although he's £300/hr, he very kindly offered to have a chat with me pro-bono, to give me a steer on this, which was amazing of him, and he was really helpful in clarifying that I was right, the agent was wrong and that I should robustly argue it. He even gave me some pointers for laws I could mention, such as UTCA (1977) and 'contra proferentem', which deals with ambiguous wording in contracts and he made me much more confident in knowing I could fight this.

I emailed the agent's manager with all this info, in quite a formal way, as the initial stage of the Winkworth dispute procedure, and told him that he was not permitted to withhold November's rent from me, apart from the agreed fees, and that I would expect the remaining balance to be paid to me as normal.

He replied a couple of days later to say that he'd looked at everything and agreed that the wording could be seen as somewhat 'ambiguous', so would honour the interpretation of it in my favour "on this occasion" (how kind of him!), but he reiterated that the contract usually refers to a 12-month AST and so "Year 2" means a renewal of a new 12-month tenancy, so in my case of a 24-month tenancy, "Year 2" would refer to the renewal of the tenancy *after* those 24 months (which I'd already said was ludicrous) but he wouldn't hold me to that, and would only deduct the remaining 5 months' fees from Nov's rent and pay me the rest.

That was quite a relief then, as I fully expected them to keep the whole rent and rely on me bothering to sue them, so I was actually quite surprised he wasn't going to do that.

I had to chase a few times to get the payment of the rest though, as he said Accounts were still waiting for one of my tenants' payments (not true), but when I confirmed they'd both paid days earlier, I magically got paid the remainder of what I was owed.

So, the matter is resolved and I am out of their horrible "Managed Service" thing and back to having contact with my tenants and control over the management of my property, and am not out of pocket, so a 'result'.

Part of me would have been quite intrigued to see what would happen if it had gone to court, purely for entertainment value, but the Winkworth manager obviously saw sense and realised that wouldn't be a good idea.

He asked for details of how I was unhappy with their Managed Service, as he wasn't aware of any complaints, so I wrote an account of everything that happened with that, and included a statement from my tenants, describing how it had been for them (they described it to me as "a nightmare"), and I said again that although I was happy with the resolution to the matter, it remained that what they'd attempted to do was wrong and his justification of it was also wrong.

I feel bad for my tenants who had to deal with WW while I was being a remote, uncontactable landlord, which I've never done before and will never do again.  It probably suits a lot of LL's, but I think I 'care' too much and want everything to be just right, so can only do that myself.

Anyway, I think I made my point to Winkworth about their shady practices, so am glad it's resolved.

Now I just need to work out whether I need to move the deposit away from them and how, and anything else I need to do to extricate myself from WW's clutches and get back to some 'normaiity'.

The whole thing was so much more stressful than it should have been, but I'm pleased I fought it and didn't let them get away with ripping me off, and I suppose it's all useful experience in the end.

Thanks to everyone on here for your words of wisdom too!

*and breathe*....
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« Reply #15 on: November 11, 2021, 05:04:09 PM »

Deposit under your control = yes.
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« Reply #16 on: November 11, 2021, 05:07:46 PM »

Yep, I'll get on to it!
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« Reply #17 on: November 12, 2021, 03:22:42 PM »

Brilliant. Glad to hear things are good.
And keeps things in mind for me aswel.
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« Reply #18 on: November 12, 2021, 03:26:01 PM »

Thanks Steven.  Yes, very stressful and annoying, but seems to be resolved now and all a 'learning curve', indeed.

I've just set up a custodial account at the TDS and have emailed Winkworth instructing them to transfer the deposit to me, which, according to the TDS, they have to comply with, so we'll see if WW come up with obstacles or reasons as to why they won't....!
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« Reply #19 on: November 12, 2021, 05:52:43 PM »

Thanks Steven.  Yes, very stressful and annoying, but seems to be resolved now and all a 'learning curve', indeed.

I've just set up a custodial account at the TDS and have emailed Winkworth instructing them to transfer the deposit to me, which, according to the TDS, they have to comply with, so we'll see if WW come up with obstacles or reasons as to why they won't....!

Keep us updated on that one. Bets are on.
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« Reply #20 on: November 12, 2021, 06:01:30 PM »

Ha!  We shall see! 
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« Reply #21 on: November 13, 2021, 07:48:54 PM »

Amazingly, they did that today, although she did say she couldn't do it without my supplying her with the tenants' 'EW' number, which I don't have, so I told her as she'd registered the deposit originally, she'd have access to find that number.

And low and behold, she did, so that's something...  I think I need to issue a "Prescribed Info" document to my tenants now, but am not very sure about that so will investigate on Monday....
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« Reply #22 on: November 15, 2021, 02:34:14 PM »

Question:  Wanted to ask though, is it enough to email my tenants the new Tenancy Deposit Protection Cert, and the new Prescribed Info doc (as a PDF) to sign, or must these things always be posted as hard copies?
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« Reply #23 on: November 15, 2021, 10:13:32 PM »

You need to look at what the your Tenancy Agreement says about notices by email.


Here's an example that permits emails:

13.2 Any notice served upon the Tenant by the Landlord pursuant to this agreement or any statute or regulation must be served in writing and will be deemed sufficiently served if sent by registered post or first class post to or left at the Premises. Notices served by recorded delivery post, or prepaid first class post to the Premises, shall be deemed to have been properly served and received by the Tenant on the second day after posting (or if that day is not a working day on the next working day), or in the case of notices left at the Premises on the next working day after delivery.

13.3. The Landlord and the Tenant agree that notices pursuant to this agreement may be served on the other party by email. The email addresses for notice are:

Landlord: aaa@bbb.com
Tenant:    ccc@ddd.com

13.4. Notice served by email shall be deemed sufficiently served if it is sent to the Tenant or the Landlord at the email addresses identified above in this agreement and no notification of failure to deliver that email is received. Notices served by email will be deemed served on the next working day after sending.

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« Reply #24 on: November 15, 2021, 10:29:31 PM »

Quote from: MattyBur
...and the new Prescribed Info doc (as a PDF) to sign

Also, don't assume that you tenants own a printer so they can print the document, sign it, (scan it?), and return it to you.

Nor should you assume that they are IT savvy and know how to use Fill and Sign in Acrobat Reader (for example), to sign the PDF.

If you need a signature on a doc, it is probably safer to post them a paper copy, along with a stamped addressed envelope to speed its return to you - then you scan it and email it to them (if your tenancy agreement allows this).
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« Reply #25 on: November 15, 2021, 11:26:17 PM »

Hi handyman. Thanks for the info!

I don't think there is anything in the lease that mentions email, but I asked the TDS and they said these docs can be emailed.

My tenants said they were fine to electronically sign the PDF, which is great, but maybe I can post them back a hard copy of them too, when all signed.  Hmmmm...
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