Rent Guarantee Scheme

[James]

Hi,

Any advice greatly appreciated.

We rented our house out through an agent (tenants moved out in Jan 05). We recently found out the agent were receiving £100 more in rent from the tenant than they were telling us they were receiving (i.e. the statements they sent us indicated £600 received, and the tenant confirmed they were paying £700).

I asked the agent in writing why this discrepancy and they wrote back saying we had agreed to their rent guarantee scheme, (apparently designed to allow those without the financial credibility to rent a house) by which they guarenteed the amount of rent we got regardless of what was paid!

So, they arranged to charge the tenant £700 and only paid us £600 (minus their commission of course).

We do not recall signing to any such thing and certainly did not have such a scheme explained to us.

Where do we stand and what should we do?

Any adivice greatly appreciated.

With regards,

James.

[Tax Accountant]

I would ask them for proof of your agreement to the scheme. If none is produced, consider reporting them to their regulatory body, if any. Failing this, consult a solicitor or lodge a claim in a small claims court.

They cannot assume your acceptance of the scheme without your specific agreement thereto.

Ramnik

[Anthony]

I'm no expert but my understanding of rent guarantee schemes is that they are (meant to be) a form of insurance that pays out when a tenant cannot or will not honour his/her financial obligations under the tenancy agreement. I was quoted a premium of 100 pounds/year on a property with similar rental value as yours. But if your agent is as shady as he sounds it's possible some dodgy small print was included in your contract with him.

I'd certainly threaten legal action. When an agent I used in London persistently held on to rent monies for several months I found that there is a simple online version of the small claims court. See moneyclaim.gov.uk. The threat of using this was enough to make them pay up.

[Paul_f]

Anthony. You're confusing insurance policies that are available against tenant not paying th rent, and agents who offer to "guarantee" that you will receive rent even when your property is empty. Of course they will need to have an agreement with you, but it doesn't have to be in wiriting unless they are members of one of the three main professional bodies, so you might find it hard to to prove anything, and they might actually be doing you a favour in the long-term.