Can this site accept unethical landlords? | Discuss

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Can this site accept unethical landlords?
23/02/2012
7:51 pm
pierceandco.co.uk
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Same story heard many times before.

Yesterday we went to a property to do the inventory with the new tenant who was moving in on Saturday (Note I said "was"). On arrival we found a new chubb lock on the door so rang the old managing agent thinking we had missed it before. Unlikely given we had done the inventory a few days ago and it wasn't there then – we have pictures and keys to prove it!

The old managing agent tells us that they have a tenant moving in on Friday?!!? After a few phone calls to the landlord we find out he is out of the country, had a better offer for the rent (we got the market rent), and to top it all, the old managing agents are now managing it and have installed the chubb lock as their old tenant had moved out owing 2 months rent.

An email to the landlord asking what is going on gets a reply that he is having to take the higher offer as he has lost too much money and needs to recover some of his losses.

With a new tenant moving into their property on Sunday, where does that leave our client? I'll tell you where. He is a 28 year old professional chap with a 30 year old wife and a 9 month old baby with no family in the area and friends that will put them up for a few days (With their furniture in storage!). A frantic appeal to our friends, landlords, associates, old and new clients, ends in finding a suitable property which happens to be available as of Sunday. Laugh

We don't mind if this happens but at least give us a fighting chance to source another property.Yell

Mark A Reynolds

Pierce & Co Residential Letting Agents

http://www.pierceandco.co.uk

01296 20 1234

24/02/2012
11:43 am
Rigsby
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Had a similar situation a couple of weeks ago. Old Tenant moving out landlord given permission for new tenant (higher rent and only about a 5 day vacant period) Then landlord informs us they want to put a relation into the property at last minute. Good job the tenants can stay on where they are for a bit longer.

24/02/2012
3:23 pm
PaulBarrett
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This is clearly unfair though I have to say tenants are to blame sometimes.

I had some tenants who stated yes we definitely want the place 1 month from now.

I took the property off the market.

Nothing ever heard from them again.

Took another month to rent the place out or rather it took 4 months as the flat suffered a flood.

So no rent for 4 months as no tenant meant no insurance money for tenant.

I have not ever accepted one; but just recently a tenant insisted on paying me a non-refundable deposit to take the flat off the market.

This I have done and there is nothing todate to suggest that he will fail to take up the tenancy.

The word of people however cannot be taken as it seems both sides take advantage.

In future I will insist on a non-refundable deposit if a tenant wants one of my rental properties, which I will then take off the market.

24/02/2012
3:45 pm
Rigsby
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But Paul in your situation if you got the tenant in a signed contract in advance with Contract dated and signed now but the fixed term dates to start at a later date there would be no backing out.

 

Thats what a agent would have done or got a large deposit.Wink

24/02/2012
5:08 pm
pierceandco.co.uk
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Paul B

This is not about a tenant failing to take up residence, we do take a deposit from a prospective tenant and once they have passed referencing it becomes non-refundable if they chose to back out – they sign at the time of completing their reference paperwork to that effect. Its not a huge deposit just enough to cover any losses on the side of the landlord. Although I do agree it is always a risk and we recently had a tenant that has done what you had done to you, but the property was still on the market until they sent over their holding deposit. Glad we did because they are now no longer contactable and not answering any emails, texts or voice mails.

This post is about a landlord agreeing the tenant with us, then getting a better offer and taking that instead. We even informed the agent that we were originally competing with that we had filled it and to their credit they took it off their books.

I wish I could have got annoyed and had a few glasses of wine but the landlord is a really nice guy hahaha! Laugh

Thats what a agent would have done or got a large deposit.

PS: Please note that the AST was not signed up – They had a copy to look at but they were to sign it on Saturday at the time of taking up residence. This visit was to confirm the inventory which they had access to via their online account

Mark A Reynolds

Pierce & Co Residential Letting Agents

http://www.pierceandco.co.uk

01296 20 1234

24/02/2012
6:29 pm
PaulBarrett
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I would not like to have an AST signed and dated to start at a later date.

It could cause all sorts of issues with Section 8 and Section 21 and eviction etc if the tenant did not take the tenancy on.

I much prefer to take; in my case £500 non-refundable deposit and wait til the move in day to sign the AST.That is not to say that I am not interested in how others might deal with similar circumstances.

I think though with rental demand increasing; you can't as a LL leave things hanging.

A good non-refundable deposit is a good all round solution showing commitment by LL and tenant as to the future tenancy.

My holding deposit agreement which you may obtain free from landlordzone indicates the amount of rent and deposit and is signed by LL and tenant.

So it would be hard for a LL to let the place to someone else once that holding deposit has been give.

I'm not totally sure about the legally of such an agreement but would think that is legally binding on both parties unless they mutually agreed to withdraw frm the agreement.

As rental demand increases this could become more of an issue as such an agreement should prevent the LL from increasing the rent from that already agreed and the tenant from backing out or lose his holding deposit.

Does anyone else have any other practises or ideas as to how both parties may behave ethically.

24/02/2012
7:05 pm
pierceandco.co.uk
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PaulBarrett Said:

I would not like to have an AST signed and dated to start at a later date.

It could cause all sorts of issues with Section 8 and Section 21 and eviction etc if the tenant did not take the tenancy on.

Which is the exact reason why we would never put our landlords in this position Wink

Mark A Reynolds

Pierce & Co Residential Letting Agents

http://www.pierceandco.co.uk

01296 20 1234

25/02/2012
6:20 am
Paul Routledge
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Hi All,

I am a bit confused as to Marks title of this post as it seems to imply that this site may in some way take bad landlords who are unethical and this in turn would imply that they may break the law in providing bad references plus risk a very expensive libellouscase brought about by a said tenant because they were unethical and therefore lied about a tenants previous history. When the content of the posts herein are about an obvious lack of contractual written agreement between a Landlord and his Letting Agent prior to them acting for him.  

Surely it does not make a Landlord unethical simply because an agent has not crossed his "t's" and dotted his "i's" and ensured that the Landlord would suffer a financial consequence to both the Agent and possibly the Tenant who lost out should the Landlord change his mind as to which Letting Agent he had instructed half way through?  This is a commercial problem, not an ethical problem I would say.  Since when has it been unethical to change your mind when one is not locked into a contract – it might not be gentlemanly, but I do not believe it is "unethical". This is why you have a contract, because the contract is what will determine the mutually agreed proper ethitics to adhere to and therefore this would not have happened.

Sorry for seeming dim but I do not see the connection between the title of this thread and its content?

25/02/2012
8:19 am
pierceandco.co.uk
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Thanks Paul

 

The title may be a little misleading, it was a rhetorical question as opposed to an implication Laugh

At what point does "crossing the t's and dotting the I's" within an agreement make it an unfair contract? An question that can only be answered by the decision makers.

How many landlords do you think would do business with an agent who imposes financial penalties on them should they change their mind, not many I would suggest. Especially around our area, which means we carry all the risk.

This post is not about the obligations of the landlord contractually, when it becomes a contract etc etc, that is for another day with better qualified and far better paid individuals than me. I am questioning their morals. As landlords ourselves, we have to accept that at some stage we will suffer a financial loss, its just at what point does that loss then become unacceptable. Thankfully to date, we have suffered very little and I am convinced that this is down to us being "good landlords" and looking after our tenants. Be under no illusions, we have been offered higher rents in the past, but because this will be to the cost of the tenant already lined up, we turn them down. I'm not saying what we do is right in everyone's eyes, but I believe it is Laugh

This is about agreeing to rent the property to a young couple with a 9 month old baby and then turning them away 3 days before they move in. Essentially leaving them homeless. With a few phone calls and a very late night, we managed to get them another property and I am convinced they will remain good tenants for a very long time to come.

By the way you are not being dim Laugh

Mark A Reynolds

Pierce & Co Residential Letting Agents

http://www.pierceandco.co.uk

01296 20 1234

25/02/2012
9:44 am
Rigsby
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Mark Reynolds said:

PaulBarrett Said:

I would not like to have an AST signed and dated to start at a later date.

It could cause all sorts of issues with Section 8 and Section 21 and eviction etc if the tenant did not take the tenancy on.

Which is the exact reason why we would never put our landlords in this position Wink

I cant see any problems or issues with s8 or s21 this may cause, in fact the ARLA legal trainers even recommend it.

It stops a tenant pulling out and any s8 or s21 court hearing (if the tenancy started) would be determined on the term certain and/or rent payments (which is nothing to do with what date the AST is signed).

If you choose to release a tenant from their obligations of starting the tenancy when signed early a s21 or s8 wouldnt even come into it as a s21 cannot be used before a tenancy starts and most S8 are about rent owing and none would be owed.

Or have I missed something???????

25/02/2012
10:05 am
Rigsby
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I also see it as good practice and acting in the landlords best interests as a agent. If I was a landlord and my agent said Mr Bloggs is moving out next week we found a new tenant a month ago who will move in 4 days after the old tenant vacated but then the new tenant changed their mind at the last minute I could be without a tenant for a month until a new tenant is found if there wasnt any safeguards such as a pre signed contract.

25/02/2012
12:44 pm
PaulBarrett
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Rigsby said:

I also see it as good practice and acting in the landlords best interests as a agent. If I was a landlord and my agent said Mr Bloggs is moving out next week we found a new tenant a month ago who will move in 4 days after the old tenant vacated but then the new tenant changed their mind at the last minute I could be without a tenant for a month until a new tenant is found if there wasnt any safeguards such as a pre signed contract.

Ok I might be a bit paranoid here; but let us say there was a pre-signed AST and the tenant didn't move in.

Let us say 2 months downline the tenant rquests you to supply him keys as he he is occupying the property.

He also advises he wil not be paying rent and the only way to ger rid of him is to Section 8 him or wait 6 months before enforcing a Section 21.

If you do give him the keys and get rid of the tenant you would prsumably have found for the property in the menantim; you could find yourself in court for wrongful eviction.

An extreme situation; but surely a possibility!?

25/02/2012
6:07 pm
Rigsby
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"An extreme situation; but surely a possibility!?"

I would say highly unlikely (but yes possible) and in the words of Private Fraser to Corporal Jones in Dad's Army  we are getting into the realms of fantasy.

The reason being you would have a guarantor to chase and you would have fully referanced both T & G.

You would also have taken a large chunk of rent, deposit fees etc which would show comitment by the tenant.Also you would have likely to have been in touch a number of times leading up the tenancy start date so would have likely to have got wind of something happening.

If it happened to me and he went off the radar I would have written to him, parents, work, guarantor, previous landlord, phoned texted explaining that if he did get back to me by xxxx I would take it that he longer wanted the property but he and the guarantor would be responsible until another tenant found.

If you had a guarantor in place you can bet your life they would get hold of the tenant if they thought they were going to have to pay out.

Remember you should have used a carfully worded signed reciept for any funds taken in advance. The three basic components of a contract are offer, consideration and acceptance

You also have the abandened property to follow it up with. (yes i know, but it is a usefull tool)

Nothing is risk free in letting and if we wanted risk free we would put our cash in the post office.

 

  

25/02/2012
7:03 pm
PaulBarrett
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Your strategy is totally correct.

But what about those LL that don't have an RGI policy or a guarantor.

They could be in deep doo doos.

In my case I don't start the RGI policy until the AST signing day, generally the move in day.

RGI credit checking has been done and you have so many days to start the RGI policy.

And I suppose the level of advance rent/or deposit is up to your requirements.

What level of commitment in money terms would you require of a tenant of yours when taking advance monies?

26/02/2012
9:57 am
Rigsby
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Every situation is differant but I would first require the ref fee's and £100 holding fee. Once the ref's had come back ok I would ask for a larger or full deposit paid if there was a number of weeks before the tenancy started. We have been burned before and if a tenant found a more suitable property to move into the ref fee and 100 quid wasnt a great loss to them.

If then they wanted out they would think twice due to the amount funds being paid to date and put you in a better position. It isnt about forcing people to take a property they dont want or their situation has changed its about covering your loses and costs (landlord & agent).

 

50% of the time this situation arrises ( not very often) the tenants offer to pay all funds up-front any way so there is no chance of losing the property. If they didnt have a guarantor I would require this.

 

If a tenant is going to try to stitch you up it will happen wether they signed a month in advance or on the day of the tenancy fixed term.

27/02/2012
8:16 pm
mary latham
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I see Pauls point about the title of the thread in terms of reference to the site but I actually do see the issue as an ethical issue.

 

Without trust the PRS is sunk.  We trust when we give the keys to £200K worth of property to a tenant who has given us £1K of his money and signed a contract.  We trust when we give an Agent the keys to this valuable asset and enpower him to find a tenant and to manage the tenancy on our behalf.  Everything that this Agent does or does not do is done on the landlords behalf and if the law is broken it is the landlord who will utimately face the legal consequences. 

The tenant too trusts when he gives a landlord or agent £1K in exchange for a signed contract and moves in all his wordly goods to what he trusts will be a nice, safe and comfortable home.  He trusts again when he gives notice to his exisiting landlord or agent and relinguishes his present home in the trust that he will have a new place to live on the agreed date.

The agent trusts that when he spends time and money sourcing and checking out a tenant and signs him up to a contract that the landlord will in fact allow the tenant to take up residence in that property and that the tenant will move in as agreed.

Our whole business in based on so much trust and yes ethics are a major issue for all three parties to this business.  There are many ways that we can cover our backs, to ensure that in the event if one of the parties breaks the trust we do not loose out financially but in the final analysis we all depend on each party keeping his word.

In my opinion this landlord behaved very badly towards both the new tenant and the agent, I know how I would feel if the agent had told me that he moved the tenant I was expecting into another property because the landlord offered him more commission.

 

In order to ensure that a tenant does not back out while he is taking the time to read and understand the AST and take advice if he needs to, the landlord or agent should take a non refundable RETAINER NOTE not a deposit. A retainer is paid so that the property is no longer marketed and the tenant is secure in the knowledge that he can spend 24 hours or so checking the AST without loosing it. If he decides to back out he does so at the cost of the retainer.  If an AST is signed before the tenancy begins it is important to make sure that the signatures are witnessed because if they are not the tenant can back out at any time before the tenancy begins with no obligation to pay anything - regardless of the terms of the AST this is the law. Once the tenant moves in he is liable under the terms of the AST regardless of whether there is a witnessed AST or not.

I am very old school I love the words "please" and "thank you" and if a person looses my trust I will NEVER trust them again regardless of the circumstances.  I don't want to be in a business where it is dog eat dog and I hope that I am renting out clouds before the PRS ever comes to it.  Please don't reply with stories about how tenants let landlords down, after 40 years I know that, but if you sleep with dogs you take precautions to prevent catching fleas.

28/02/2012
10:14 am
pierceandco.co.uk
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Hi Mary

Funnily enough, when we took the property on, one of the questions we asked was if the prospective tenant had any hobbies or interests that may interfere with other residents comfort. One tenant told us that he was in a band and practiced with his acoustic guitar up until 11pm. We put this to the landlord and he declined them after he consulted with the residents below.

That resident, who referred us in the first place (family friend), contacted me on Sunday night and told me that she was a little concerned because the new tenants had moved in, with their electric guitar and amp and were we aware of this? I explained we were no longer managing the property and they were not our tenant.

It transpires that the landlord was not aware of this and when he challenged the agent their response was, "Why would we ask that, you wanted the place rented asap!"

It does make me wonder when a landlord states that the former managing agent were not very good for a variety of reasons (backed up by reviews on independent websites), he goes back to them. I understand that having voids is expensive, we experience that just as much as any other landlord, but I would prefer to have the right tenant who will not cause a nuisance for the other residents. Quality of life is essential for all including the landlords!

We did everything to make sure as much as possible that our tenant would not pull out, and they did not. We took the retainer and took the property off the market as let.

PS: The resident below is now very nervous because the old agent were rude to her when she complained previously Frown

PPS: The landlord sent us an email saying we were brilliant (His words not mine) and he was sorry that we were not able to do business Cool

Mark A Reynolds

Pierce & Co Residential Letting Agents

http://www.pierceandco.co.uk

01296 20 1234

28/02/2012
1:46 pm
Paul Routledge
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Mark Reynolds said:

Hi Mary

Funnily enough, when we took the property on, one of the questions we asked was if the prospective tenant had any hobbies or interests that may interfere with other residents comfort. One tenant told us that he was in a band and practiced with his acoustic guitar up until 11pm. We put this to the landlord and he declined them after he consulted with the residents below.

That resident, who referred us in the first place (family friend), contacted me on Sunday night and told me that she was a little concerned because the new tenants had moved in, with their electric guitar and amp and were we aware of this? I explained we were no longer managing the property and they were not our tenant.

It transpires that the landlord was not aware of this and when he challenged the agent their response was, "Why would we ask that, you wanted the place rented asap!"

It does make me wonder when a landlord states that the former managing agent were not very good for a variety of reasons (backed up by reviews on independent websites), he goes back to them. I understand that having voids is expensive, we experience that just as much as any other landlord, but I would prefer to have the right tenant who will not cause a nuisance for the other residents. Quality of life is essential for all including the landlords!

We did everything to make sure as much as possible that our tenant would not pull out, and they did not. We took the retainer and took the property off the market as let.

PS: The resident below is now very nervous because the old agent were rude to her when she complained previously Frown

PPS: The landlord sent us an email saying we were brilliant (His words not mine) and he was sorry that we were not able to do business Cool

Hi Mary,

I am also very old school but I am also a realist in these different times so in God I trust the rest pay cash :-).

The word trust is a bit more palatable when 2 persons have a signed contract that outlines the ethics with which they should agree upon, lets face it ones man's meat is another man's gravy and he who puts trust in a hand shake with spit on it hoping the other guy is a goodie is usually called a bankrupt. 

Unfortunately we live in a society which does not live by the rules, like we do, and we have to accept that is now the world we live in! We have been subjected to the most horrendous lies and libellous allegations about our company yet those who perpetrated them are still befriended by some who turn a blind eye because it suits their mandate rather than what's right.

 So where are the ethics in that then?

09/03/2012
10:22 pm
LyndonBaker
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I like Mary's idea of a "Retainer note". This seems to be similar to "Mesne Profits" as a means to avoiding contravening legislation. There is a difference of opinion on taking deposits, holding fees etc in anticipation of a tenancy and whether they need to be protected. I am no legal expert but:

Against: http://www.lettingagenttoday.c.....-too-early

For: http://blog.anthonygold.co.uk/.....clarity/ 

 

Having said that, the second link which could be said to be in favour of holding deposits appears to contradict itself at times. Perhaps an amount which cannot equate to either a month's rent or a deposit figure but would cover the landlord's/agent's costs for remarketing, would be less likely to be subject to deposit protection. Wiser heads than mine would take the final decision I suspect.

17/06/2014
10:56 pm
Patricia A
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mary latham said :

The tenant too trusts when he gives a landlord or agent £1K in exchange for a signed contract and moves in all his wordly goods to what he trusts will be a nice, safe and comfortable home.  He trusts again when he gives notice to his exisiting landlord or agent and relinguishes his present home in the trust that he will have a new place to live on the agreed date.

In my opinion this landlord behaved very badly towards both the new tenant and the agent, I know how I would feel if the agent had told me that he moved the tenant I was expecting into another property because the landlord offered him more commission.

One of my tenants had that happen. He paid all the money up front for a house. Gave me notice. Arranged a moving day.  At the last minute the Landlord decided not to rent the house.My tenant had to put his goods into storage and move his family into a B&B . I could not accomodate him because i had promised the property to my next tenant . I think that is an awful thing for a LL to do. Very unprofessional 

Mary:   I also use retainers-one of the first things i learn't at an NLA meeting 

 

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