Letting Agents' management contract- fraud/scam?

[negotiators]

Management Contract
We are the joint owners of a property which is owned by us outright (no mortgage) for the past 20 years.
This property comprises of a shop on the ground floor with two flats above. In the past our flats were leased out for many years to the council’s housing department. Unfortunately those leases came to end last year due to the government’s new housing rules.

Last month my husband approached an agent who was interested to take one the flats on a management
contract . What I didn’t know was that the contract was signed by my husband only but not by me. I was obviously unhappy that this was done before obtaining any background checks on the agent. I was quite surprised that the agent wanted to move a tenant in straight away without having any gas- and/or electrical checks carried out as this is a mandatory procedure especially if a tenant is in receipt o LHA. Besides the flat was still undergoing vital safety checks which were not completed at that stage.

No inventory took place nor were we given a copy of the tenancy agreement . In view of that I contacted the agent immediately via email stressing that we cannot allow any tenant moving in without having all necessary inspections carried out. One of their people phoned the next day saying that a contract was signed and that they need to move in a tenant straight away. I told them that we cannot allow tenants moving in without having the safety checks carried out. I warned them via email if they decide to ignore my warnings and move the tenant in I will report the agent for trespassing. No reply has been received by the agent. We decided to change the locks of the flat to avoid an escalation. As of today the flat remains unoccupied. No payments of any kind were ever made to us from the aforesaid agent.

However, seven days later a bill was sent to my husband asking for the payment of management fees of £914.96 incl. VAT representing 10% of the assumed annual rent. We decided to ignore the bill and didn’t reply.

Seven days later a reminder was sent by the agent stating:
Payment of the amounts is expected in full within 28 days to avoid further action from being taken.

Would appreciate to have any advice as to how we should proceed from here.

[Paul_f]

I'm a little concerend that the agent did not verify that you are joint owners of the premises beforehand and you could put it to them that they didn't ask your permission. If the terms of business stating that you husband signed on behalf of all joint or co-owners then it might be more difficult.

Under the Money Laundering Regulations 2007 an agent is obliged to make a risk-based assessment so should have at least downloaded a copy from the Land Registry which would have shown all owners, and costs £4.00.

If the agent is unregulated then I wouldn't be dealing with them unless they were well known to you beforehand. I wouldn't be paying their bill unless you have received copies of all the references they took up on behalf of the tenant and that you are satisfied they did a thorough and professional job. I suspect they didn't.

Can you also remove your previous post as it's a duplication?

[negotiators]

Thanks Paul_f for your reply.
I cannot see anything in the contract that states that my husband signed on my behalf. The wordings in this particular contract are very strangely formulated and I am very suspicious that it was a set up with the intent to fraudulently extract money from landlords. Am I allowed to attach a copy of the management contract on this forum?

Our previous leasing contracts with the council were set up by their legal department and needed to be signed and witnessed by ALL owners of the property and Office Copies were requested + submitted to establish the ownership and everything was done in a correct legal manner.

Would you suggest to obtain professional legal advice forthwith?

It's my first post here on this forum and I'm sorry for the duplication. I wish to delete it - but don't know how ?

[Snorkerz]

Presuming you are in England/Wales...

The agency acted on your husbands behalf and found a tenant. The agreement your husband signed almost certainly stated that he had authority to instruct the agency. Presuming that the tenant had a tenancy agreement signed by the agent on your behalf (the agency agreement would have given them that authority) then I am very suprised the tenant is not taking action against you for changing the locks and not allowing them to take up their lawful tenancy.

Electrical safety checks, whilst desirable, are not mandatory in England/Wales for non HMOs, and as the property was un-let it couldn't have been a HMO at the time of letting.

An Inventory would only be taken when the tenant moved in - so you wouldn't have had one of those. As no tenancy occurred, I am not sure if your desire for a copy of the tenancy agreement is really enforceable either.

Hubby employed agents to find tenant, agent found tenant, you prevented tenant taking up tenancy.

Short of he fact that the agency hadn't organised the gas safety checks before the tenant moved in (maybe they were going to but couldn't because you changed the locks - it's not a big job) they seem to have done what your husband employed them to do. Therefore they would probably have quite a strong case in court.

I suspect negotiation would be the order of the day - but you will have to expect to pay the agency something for their work.

Is the agency a member of any trade association like ARLA? If so, they should be your first port of call for advice.

[negotiators]

Hello,
This was my first post on this forum and a duplicate was made by mistake - please see the one called Management contract scam ?. where Paul f - Top Expert - replied.

I am not sure that an agent can set up an agreement without seeking the permission of ALL owners of that property whether it's the hubby or anyone else.

Perhaps I should have mentioned that the agent mentioned only verbally that he has a tenant (single male) just hours after the contract was signed. We requested the sight of the AST - which was not submitted. Next morning someone with whom we never dealt before contacted us saying they want to move in a tenant which is a female with baby (???) We were never informed by the agent that someone else would contact us regarding moving in a different tenant. How come the agent gave permission + keys to people we were not previously informed of ? We had serious misgivings about that and other things and suspected a subletting scam. Suppose the tenant had moved in and came to harm a few days later as as result of a faulty appliance etc. ? Who would have been made responsible ? How on earth can you let people move into premises that had no safety checks carried out - isn't that a criminal offence ?

[Snorkerz]

Yes, I saw Paul-F response to your other post too. I don't dispute that the agent seems somewhat inefficient, but as it happens, they didn't move someone into your flat without safety checks being done.

They might argue that they had a gas engineer booked to check the gas safety on (say) Thursday morning, and tenants scheduled to move in on Thursday afternoon. Gas engineer turned up and couldn't get in due to locks being changed. If that were the case, the lack of gas safety certficate would fall onto you, because it would have been you who prevented it happening.

I'm not saying that WAS what happened, just that it COULD have happened that way.

I was interested in Paul f's observations re the Money Laundering 2007 act, I may use that in my own anti-agent court case! The agreement my ex-agent used stated
The Landlord Confirms that he/she is the sole or joint owner of the Property and that he/she has the right to rent out the Property under the terms of the mortgage or head lease.If the agreement your husband signed includes a clause like this, it may cover that legislation and move the onus onto your husband.

[Paul_f]

I would indeed suggest you speak with your solicitor.

[Moderator1]

Two threads by the same member have been merged here. Please do not start a new thread if you merely wish to continue a previous discussion or report on subsequent developments. It can cause unnecessary confusion (quite apart from losing the connection with facts previously established or legal points previously explained).