UK Landlord Forum / Life

I am a new landlord and I need some help please from anyone with experience in dealing with estate agents as I am unsure whether I have any rights. My estate agent found a tenant who they described as ideal. The description was of a single occupant, renting on her own for 3 years, with good references, and a good day rate as a contractor. The tenant offered the full asking price and the estate agent asked if we wanted to proceed which we did based on the information provided.

The credit checks have now come back on the tenant, the current address (for which the reference has been provided) is not appearing on the background checks through a market leading credit checking agency. In addition to this, the history shows this tenant only having had a bank account for 1 year, no prior bank accounts held. Immediate question is how did this person rent privately for 3 years without a bank account? I ran my own private check and found the tenant lived at one of the addresses with her brother as they are both in the electoral roll at this address yet I am told by the estate agent she let on her own and could manage the rent without issues.

The agency is recommending that self-billing invoices for the past 3 months are sufficient for the tenant but this tenant is self-employed as a contractor. Being self-employed myself, I am used to at least audited statements of accounts being requested to proof consistency in income. Given the agent is not doing this, I have researched the tenant's limited company via which she operates and found it to have recently been downgraded from an E to an F in the credit score, something that I find alarming.. There is no cash in the company and a large ratio of debts to assets.  I discussed this with the agent and their position is her limited company is not a factor in the decision even though this is her only source of income.

The agency has also not carried out other checks that I believe are also necessary including checks on myself to ensure I am the legal owner of the property, they have not checked my passport either to ensure I am legally in this country. Sure the primary concern is the tenant but given money laundry and other issues, many reputable estate agents also carry due diligence to ensure the landlord is legally able to rent the property and it isn't a sublet. If they are not checking this, what peace of mind do I have that all other items are as should be?

The agency inform me that as the tenant has a guarantor, I do not need to concern myself with any of the above red flags and they have been doing this for X number of years so what is my problem in trusting that all is OK. If I pull out because of the inconsistencies, under the terms of business I have to pay the agency £500 plus VAT as we already accepted the tenant's offer in principle (even though this is done before referencing). 

I am very concerned but I am also very new to this. I do not know what my rights are or whether the practices of this agent are legitimate. If you have some advice, this is most welcomed. Ideally I would cancel but £500 is excessive and unfair considering they are asking me to accept when there are items that do not stack up. It seems the only main item they believe is important is the guarantor and not the person that is actually going to occupy the flat.

Do not proceed with this.I would tell the agents in writing the various ways in which you disagree with their idea of an "ideal" tenant.Furthermore,why have they requested a guarantor? This is normally done with  young tenants who will be getting some parental support,or those with CCJ's on their record.It sounds as if they suspect she is flakey.A guarantor agreement is worthless anyway

Among a few very bad tenants, I have had a couple of organised criminals.In both cases I argued beforehand with the agents,stories that did not stand up,contradictory remarks.I was, in both cases, reminded that they and I could be sued for racial discrimination if I refused.I won't bore you with the details of the ensuing events,but a lot of money and sleep was lost.I wish I had not let myself be emotionally blackmailed.

If they pursue you for £500 I would contest it.They won't give a toss about what happens to you,just as long as they get their fees paid upfront.     

Everything Heavy says is correct. 

This sounds dodgy.
Best advice (not only for a new landlord): if you feel it is dodgy then for you it is dodgy.  You will not be happy with it for a very long time.
No business is worth being unhappy all the time.

The guarantor is usually worthless, and self billed invoices even less.
Where are the references from her clients?

DO NOT go ahead with this.
Let the agency try and come after you for the £500.00, but if all the checks and other info came to light post the tenants offer in principle then they have no leg to stand on.

They will come after you (a nasty letter is easy to type out)
Do not be alarmed by the letters they will send you.
Simply keep all the information you have (documented).
In the inevitable paper chase you can send them your case with reasons one piece at a time until they realise they will get nothing from you.

If you signed anything have a read of that document, might give some clues as to how to dispute their claim.

Best of luck

Quote from: Pim81 on February 02, 2018, 05:01:29 PMThe agency inform me that as the tenant has a guarantor, I do not need to concern myself with any of the above red flags and they have been doing this for X number of years so what is my problem in trusting that all is OK. If I pull out because of the inconsistencies, under the terms of business I have to pay the agency £500 plus VAT as we already accepted the tenant's offer in principle (even though this is done before referencing).

Let's follow that through logically... the Agent's terms of business, that you've admittedly signed, seem to be saying that if they find you a Tenant and you accept their offer in principle, prior to referencing, then whatever happens in referencing means you still have to take on the prospective Tenant or pay them some kind of punitive aborted Finder's Fee?

I've never heard of such practice, and wouldn't play ball. It certainly seems like the Agent has forgotten who it is that they work for. For the avoidance of doubt - that's you.

I have had prospective Tenants fall through on a Tenant Find exercise before... I did not have to pay the Agent anything. They were doing Tenant Find for me. I paid them the agreed fee when they found me a Tenant that I (not they) was happy with.

You are the one handing over a very expensive asset - not them. They obviously do not care about your misgivings here - and that means they do not care about you. I'd be heading quickly in the other direction... regardless of whether I had to eventually pay out the £500 'fine'... which I wouldn't.

Common sense needs to prevail... and maybe that is what is lacking here.

Just wanted to thank you all for taking the time to provide me with some guidance on this. I have followed the advice provided by yourselves and informed the agent that we will not proceed with the tenant. I am in the process of documenting all the reasons as the agent is asking me for the £500. Apparently they will waiver this if I agree to carry on the search exclusively with them, seems like I am being held to ransom.

Further discussions took place in which again we formally asked for statements of accounts for the tenant's limited company (sole for of income), the response in writing was that we already had a couple of month's of self-raised invoices and that is more than sufficient.

I think the next steps are going to be for us to proof why we don't agree that the vetting process was completed in a satisfactory manner. Either way they say their terms indicate that one an offer is made, we should pay at least £500 as they had to do some work in vetting the tenant. My argument back will include that their own terms of business say that for a self-employed, they will get an auditors letter, statement of accounts and bank reference, neither of which were provided.

I am very grateful to you all as I think I have avoided a big mistake. Thank you!