Agent charging fees to tenant too

[Worldlife]

This is a follow up to Find only services (http://www.landlordzone.co.uk/forums/showthread.php?t=2532)

If a letting agent who is not bonded suspends trading what would be the situation if:-


The agent had charged fees to both the tenant and landlord
The tenant and willingly paid the agent one years rent in advance and agent had given the tenant a receipt for this money.
The agent had issued the key to the tenant to attend a meeting at the property before any funds were transferred to the landlord's account


The AST mentions the deposit but makes no mention of the advance rental payment





The Tenant shall pay for the Premises and Contents (if any) the rent of £x{/b] per calendar month.
The first instalment is payable on the date of this agreement and subsequent instalments of [b] £x due on the 20th day of each month throughout the remaining term. The Tenant shall note that acceptance of cheque or other payments in settlement of rent drawn on accounts other than those of the Tenant named herein shall be on the basis that any such payment is made by an agent on behalf of the Tenant nor can it be taken to imply that the drawer of the cheque or other payment is recognised as the Tenant Phew - what are they getting at in plain English!
The Tenant shall pay the sum of £x as a security deposit to be held by the Landlord against any claim in respect of damages or compensation as provided herein which may have been found to accrued or against any sums payable pursuant to the terms of the Tenancy Agreement (including rent due) at the termination of the tenancy. The sum shall be held by the Landlord and any balance remaining after satisfaction of such claim shall be paid to the Tenant as soon as practicable after the termination of the Temnancy. Interest will not be paid on this deposit.
The Tenant agrees with the Landlord: To pay the Rent on the days and in the manner specified to the Landlord or the Agent


Does the collapse of the agency before the transfer of funds to the landlord frustrate and invalidate the tenancy agreement?

Who will lose out here? Has the tenant gained right of possession and would Court orders be needed to get the property back? Might the landlord have to provide 'rent free' accommodation for the period of the tenancy?

[pms]

This is a follow up to Find only services (http://www.landlordzone.co.uk/forums/showthread.php?t=2532)

Does the collapse of the agency before the transfer of funds to the landlord frustrate and invalidate the tenancy agreement?

Who will lose out here? Has the tenant gained right of possession and would Court orders be needed to get the property back? Might the landlord have to provide 'rent free' accommodation for the period of the tenancy?

Difficult one here.If the tenancy agreement was signed then the tenant would have secure of tenure from the date signed for the inital period.It's a bit of a merry go round because there are two issues.1) The tenant has paid the agent and no doubt got a recepit to prove payment.So that issue is resolved.2)The agency goes bust before transfer of funds to the Landlord so it is now between the agency and the Landlord so in effect the Landlord has lost out.I would imagine that a court order would be needed to get the property back as the tenant would have "secure of tenure" but a point I would make is who would the tenant pay the rent to as the agreement is with the agent.Not something I've come across personally but I have heard of it happening.May well have to do some research on this one as I'm sure there is something in one of the Act's that deals with this type of scenario.

Although your scenario is a little bit different because the tenant is paying a year upfront it would apply either way monthly or yearly.

[Worldlife]

Difficult one here.<snip>but a point I would make is who would the tenant pay the rent to as the agreement is with the agent.<snip>


The AST was not signed by the Lettings Agency. It was signed by the landlord.

Wonder if clause 2 quoted above may then be relevant:-


# The first instalment is payable on the date of this agreement and subsequent instalments of £x due on the 20th day of each month throughout the remaining term. The Tenant shall note that acceptance of cheque or other payments in settlement of rent drawn on accounts other than those of the Tenant named herein shall be on the basis that any such payment is made by an agent on behalf of the Tenant nor can it be taken to imply that the drawer of the cheque or other payment is recognised as the Tenant Phew - what are they getting at in plain English!

Previous contracts I have prepared show the deposit and the initial one month in advance payment. Should the tenant have insisted the AST was amended in this case to show a deposit and twelve months rent had been paid in advance? The monthly rental clauses seem questionable in such circumstances.

Unless funds were transferred from the agent to the landlord could the contract be invalidated insofar as the tenant is not paying rent in accordance with the contract clauses.

I have every confidence that the cheque from the Letting Agent that I have deposited in my account today will indeed be honoured!!!

This seems to suggest that the Government deposit scheme is a half-baked hairbrained idea. Surely in addition to deposits the Government should protect substantial advance rental payments that may be made by tenants from losses caused by fly by night agents.

[Worldlife]

The signed agreement beginning with the words THIS AGREEMENT is made on 20th May 2006 consists of six pages.

Under paragraph 1 "Definitions and Interpretation" there is a paragraph;-


1.1 "The Property" means the residential property known as,
together with its garden(if any) and appurtances.

The address of the property has not been inserted after "as,"

There then follows a critical clause..


2.0 The Landlord hereby lets and the Tenant hereby takes the Property together with any fixtures, effects and furniture as the same are more particularly described in the Inventory and Schedule of condition signed by the Tenant (The "Contents")

The only guidance we have as to the "Property" is a cover page before the Agreement including the words ASSURED SHORTHOLD TENANCY AGREEMENT For letting residential dwelling house Known as: Full address of dwelling house is given in five lines of 14 point font

Does this cover page attached to the agreement affect the validity or otherwise of the agreement in relation to the failure to complete clause 1.1?

What ar the general legal principles of nit picking the completion of the AST. It is obvious that the cover sheet intended it to apply to a specific property!!

"Premises" is not defined but from paragraph 3 of the Agreement the term "Premises" is used instead of "Property"

e.g.


3.1 The Tenant shall pay for the Premises and Contents (if any) the rent of £ x (x Hundred and x Pounds per calendar month

The document then subsequently reverts to using the term "Property"


The tenant has, however paid one year's rent in advance and the cheque from the "find only" agent has been cleared.

It is understood in a few month's time one of the tenants will be bringing his wife into the Country from Russia and would wish her name to be added to the tenancy agreement.

Am I correct in thinking a new agreement will be needed? I would prefer a proforma one to this solicitor designed one that has been badly completed. I would not want any new agreement to prejudice the deposit and advance rental payments I already hold.

Alternatively could the original tenants and the immigrant wife sign a letter to the landlord seeking consent to wife being party to the AST and for the landlord validate that letter?

Some thoughts and guidance would be appreciated.