Letting Agent Withholding Rent and Deposit

[jonsnowy]

Hi All

Wondering if anyone else has had this problem with this or any other agent.

Ive been going through this saga with this agent since August 2007. Partly my fault its gone on so long. I didnt jump on the agent quick enough when the rent stopped being passed to me.

OK, from the begining.... in June 2006 I purchased the property off plan. It remained vacant until Septmeber/October 2006 when the agent in question, Keyhole Property Management Ltd, found me a tenant. They seemed very professional and friendly. Things went well for a couple of months, then over Christmas of 2006 they had some bank problems which resulted in me not getting rent until February 2007. Fair enough though, they paid the back rent and apologised profusely. Things carried on well until August 2007. That was the last time I saw any rent!! After some gentle emails and phone calls asking where my money was they gave me the same story about their BACS system being up the spout. When asked why I couldnt just have the cash or Bankers Draft they're MD replied "I'm doing my best to get your money to you". I have had a series of broken promises, bounced cheques, evaded contact and bare faced lies.

To date Keyhole Property owes me £10,000 in rent and deposit. I have a Court Warrant issued against them for £5,000 (the maximum allowed with a warrant from HMCS). Waiting to hear what happens with that. Keyhole dont even respond to my calls or emails or letters anymore.

Has anyone else had problems with this agent or got any ideas what else I can do to get my money?

I'm getting quite desperate now. I've even contacted the local newspaper to run a story on them.

[susanne]

sounds like you are unlikely to get the money - have you asked the bailiffs to seize goods ? - do they have goods worth this much ? can you go for an attachment of earnings ?

but all these court procedures may mean you are simply throwing good money after bad ....

[jonsnowy]

Its a court bailiff so I cant ask them to do anything. They just do their thing. Im not holding out too much hope to be honest.

I spoke to a reporter at the Peterborough Evening Telegraph. Apparently someone else has made a complaint against the company for running off with their deposit.

[susanne]

""Its a court bailiff so I cant ask them to do anything"

i dont understand. is the rental agent also a bailiff ? Have you asked the court to appoint a different bailiff ?

[Paul_f]

Remember if they are NAEA/ARLA agents then there is likely to be insurance in place to protect some of your lost funds.

[jonsnowy]

UPDATE:
Keyhole Property Management Ltd are in liquidation. Now I'm really screwed!!

They weren't a member of ARLA. Don't know about NAEA though.

[lorenzo]

Our Fees....

....We believe our fees are among the most competitive in the area, without sacrificing the service our clients receive.

The cheapest ain't necessarily the cheapest. :(

Tough luck.

[jonsnowy]

They were obviously too damn cheap! They made enough out of me though!!

[kayak]

We have a separate client account, which is verified in writing by the bank that in the case of us going bust that monies in this account wouldn't be counted against our debts. Surely they must have operated a separate client account from their office account?

You don't have to be a member of ARLA to do things above board, but ARLA force you to do it, which does give some security.

I am afraid I know very little about what happens now so I can't really help.

Kind regards,

John

[jonsnowy]

Appreciate everyone's comments and advice.

Just got a quick update for anyone still interested. The company Keyhole Property Management Ltd had gone into liquidation and all indications from the liquidators shows that none of the creditors (i.e. me) will get any kind of payment. There was no insurance in place and no secure account for landlord payments. I assume that my tenants deposit was also lost.

I would advise any budding land lord to NEVER use a letting agent to manage their property. They are nothing but trouble!! It doesn't take much to manage a property if you prepare it well before the tenants move in. There is also something to be said for giving your tenants a friendly personal point of contact if they do have problems. They are much more likely to stay longer.

I have recently heard from some tenants that have had equally as much trouble with agents as landlords do so its not just one sided.

[jeffrey]

Tell liquidator that you wish to trace [use this specific wording] the money which the agents were holding on trust for you [ditto].
Even though they had no client/trust account, the money was yours beneficially. They held it legally. Thus there is a clear trust scheme, and- more importantly- clear evidence of breach of trust.

[brokentoy]

Unfortunately, the liquidator is not going to fork out for a tracing agent. When we had a similar problem, we were told that if the authorities would not do anything, then the creditors would need to pay for a tracing agent (quoted £3k for the service) and, if anything was found, we would need to pay for court costs for suing the agents.

[jeffrey]

I see. However, I meant "trace" in a technical sense- defrauded beneficiary of trust's right to follow trust money from:
a. where it was before (rightfully) to
b. where it is now (but shouldn't be).

[brokentoy]

Okay I see what you mean. But I know that in our situation, the known creditors consisted of both tenants (wishing for their deposits) and landlords (wishing for outstanding rent). The liquidator did some investigation into the accounts of the real estate agent (which almost sounded like the accounts never existed), to see if there was any money to return to the creditors.

But we were told that if we wanted to find out where the money had gotten to, then we would need to pay for a tracing agent.

[Esio Trot]

... the known creditors consisted of both tenants (wishing for their deposits) and landlords (wishing for outstanding rent).

I am not wishing to rub salt in the wound, but you will need to be prepared for this. The agent was your agent when they took the tenants deposit. Thus the tenants will, quite legally, expect you to account for the deposit when they leave.

In short, the tenants as creditors of the agent, will come looking for you when they know that the agent has no money.

[brokentoy]

Hehe, no I was a tenant!! But my landlord was also liberated of some of his rent.

I was just making the point that in our case, and I would think in most cases, the liquidator will arrange to make to find out how much a tracing agent will cost, but will not pay for it out of their pocket.