AST signed for let from July 2013. Do we have to pay deposit now?

[Gerbils]

You wouldn't have a claim against the agent as you arent a potential tenant and haven't suffered a loss. Your son may have a claim, however his only loss so far is the reference fee - he hasn't yet paid the deposit. In any event, would your son co-operate with a claim? Would the other students, who just want to move into the house? Are you prepared to pay the court costs yourself for the whole group, as this will be more than the deposit you are disputing.

The agents, like it or not, have ignored you so far and will probably continue to do so.

I think you are worrying unecessarily about failing the referencing - the agents just want the house filled with as little hassle as possible and it is obvious that a six bed house will only go to students who will fail standard referencing. They probably won't bother to reference them at all, PROVIDED they get guarantors on board, however I appreciate that the referencing costs are ridiculous.

Have you really thought about the other five tenants who have been brought into this? If the tenancy doesnt go ahead they may well lose their deposit and even if the agents eventually refund it, there will be a considerable delay and in the meantime they may not be in a position (or their parents/guarantors may be unwilling)to fork out a second deposit on another house.

Do you want your son spending the next academic year living alone because he has lost his friends over this?

BTW, it is perfectly normal, for student properties, to ask for a deposit this far in advance.

I understand you are concerned about the agents,however it is not obvious that the agents are going to run away with your money. Unfortunately, with most agents (and I have been at the receiving end) it is a case of take it or leave it, and you face the prospect of your son and his friends going through the same situation all over again if this house falls through.

Have the other guarantors been informed of the current state of events?

Dare I say it might be better for all concerned to bite the bullet, sign as guarantor, pay the deposit and hope for the best? It does appear to me that you are digging a deeper and deeper hole for yourself.

(BTW, if this house only has two floors it will not be a licencable HMO).

[TMC]

Once again, thank you for all your replies.

I have checked with the council and they have said that at present it wouldn't need licensing. Additional licensing will be coming into force and will be rolled out from July.

Regarding the other prospective tenants, their guarantors and my son's friendships and accommodation next year: these are VERY MUCH on my mind. I feel strongly about the fact that the students' relative lack of experience in these matters was taken advantage of by individuals who purported to be trustworthy professionals and that is what has led to this situation.

Also, the other proposed guarantors received these documents but did not flag up the errors nor did they investigate further. They made a decision themselves to be agree to being guarantors.

Perhaps, with hindsight, it would have been easier to just agree to it all - but I am completely straight with my customers, I fleece no-one and I go the extra mile to do my best for them, and I like this quote too, "All that is necessary for the triumph of evil is for good men to do nothing". Maybe over egging it a bit but hopefully you understand my sentiment. I feel a great sense of injustice over what is happening and the far reaching problems it is causing.

To answer your question, westminster, I think the students, including my son, would all like to go ahead IF they feel they know they have a binding contract despite me not being guarantor.

My very original post/question was:

What is the status of this AST? How can we bring the situation to a conclusion?

and that is still the crux of the problem, I feel.

The students need to know one way or another:

YES we accept you (despite one parent not being a guarantor) - here is a copy of the AST signed by the landlord and your deposits are in scheme XYZ. At which point it might be reasonable for my son to pay his part of the deposit – but without this indication of a binding contract there is a risk of losing more.

or

NO we are not accepting you - in which case the students will have to decide whether to try to reclaim the deposits taken. (My sample letter was intended as possibly coming from the other students - rather than me - although I realise that I had added bits referring to me which were inappropriate – and I certainly wouldn’t recommend they do it without taking appropriate advice) - if that's the route they want to take.

I am now ‘out of the equation’ as a proposed guarantor but as a parent I will still doing my very best to help my son, AND his friends, in any way I can, in dealing with people who are very experienced in obfuscation and relieving vulnerable/inexperienced/trusting people of their money – but ultimately I appreciate that it is for my son and his friends to make the decision.

However, can they make any reasoned decision without knowing from the agent what their position is? I appreciate earlier comments said that because of the mess made by the LA only a court would be able to decide if a binding contract has been made – but they are not in a position to take this to a court to decide. I feel they can only ask the LA where they stand and work with that, or, make a decision themselves on where they stand and then fight from that position - hence my suggested/proposed letter from the students in my earlier post.

What can they do? They cannot wait until July 1st to find out – by which time the LA is likely to have been dissolved.

[TMC]

If we just put in a claim for return of the rent deposit (£1500) would that definitely just go to the small claims court.

What is the maximum fees we might incur?

[TMC]

Is this a reasonable letter to use if my son and his friends decide to go the route of reclaiming the deposits, as no proof of binding contract?

Dear ……………

LETTER BEFORE ACTION

With reference to:

• Proposed tenancy for …………………….

• Points raised in ……………'s letter of ... February 2013

• The company status for ………………………. now being 'Active - proposal to strike off' and may be dissolved in 3 months’ time - prior to the abovementioned tenancy being executed.

As you do not appear to have acted with due diligence, nor responded in a timely manner to relevant communications, and as a result have not been able to conclude the contract for the above mentioned tenancy despite 2 months having passed since we signed the AST agreement, and for the reasons outlined in the above mentioned letter, we request the immediate return of the following:

Rent deposit paid - details of amounts, by whom and bank details to go here


If these monies are not returned within 14 days we propose further action which may include but not be limited to:

• An application to Companies House to have the strike off suspended pending further actions and the return of monies due to us.

• Referral to the Legal Ombudsman

• An application to the court for the return of the complete amount for the rent deposits paid.

Yours sincerely,

[westminster]

If we just put in a claim for return of the rent deposit (£1500) would that definitely just go to the small claims court.

Yes.

What is the maximum fees we might incur?

No more than £250.

If these monies are not returned within 14 days we propose further action which may include but not be limited to:

• An application to Companies House to have the strike off suspended pending further actions and the return of monies due to us.

• Referral to the Legal Ombudsman

• An application to the court for the return of the complete amount for the rent deposits paid.

Yours sincerely,

1) Forget Companies House. 2) I think you mean the Property Ombudsman. I would pitch it as a threat of county court action only. There's an air of bluster with the other stuff which may serve to undermine the genuine threat of legal action, i.e. they might take you less seriously.

Also, as I've said before, if the agent is struck off before the tenancy starts this has no bearing on the validity of the contract possibly agreed between students and LL. The agent is acting on behalf of the LL, and may grant a tenancy on behalf of the LL or receive payments on behalf of the LL but he is not the LL. He may disappear, but the parties to the possible contract remain.

Ideally, everyone should be on board with the letter/approach. It really doesn't sound as if they are. But you could still write, making it clear that it is on behalf of your son, one of the prospective tenants. If so, you would not be demanding a refund, as your son has only paid a non-refundable referencing fee, AFAIK.

The situation is beyond my general experience/knowledge, but if you will not seek professional legal advice, then here's my penny's worth...

I think that if you/the students write to the agent asking for firm confirmation either way then it might be the case that, if the agent fails to respond by a given deadline, then you would be entitled to proceed on the basis that no contract has been concluded. I think this because it seems reasonable in the circumstances, and I think it is not reasonable for a party to a possible contract to fail to confirm his position following a very reasonable request.

I can certainly do no harm to write such a letter.

I have asked Lawcruncher to take a look at this thread, as he is much better qualified to advise you. But no idea when he might next log in.

[TMC]

Thank you westminster.

I am feeling more hopeful that it may all become clearer soon.

I am meeting my son tomorrow to tell him as much as I can about what I have learnt from this forum (which is a lot - thank you all!).

Then he is then going to meet his friends to discuss the situation with them.

I have put together a list of pros and cons for each possible outcome for them to consider.

I realise that it is for my son and his friends to make a decision as a group and that his friends have more to lose as they paid their portions of the deposit.

If they want to go ahead I will suggest to them your idea of a letter requiring confirmation of the situation from the agent.

If they want to withdraw and get the deposits returned I will suggest my letter, amended as you suggest.

If they decide to go ahead then I guess at some stage they need to start dealing with the landlord directly.

That is, of course, presuming that they can reach a decision/agreement.

Also, regarding Companies House, as quite a few students could be affected and probably lose money if/when the company is struck off, do you think the university could make an application to Companies House to suspend the strike off until monies are reclaimed? Who would be successful at preventing strike off?

Thank you :-)

[westminster]

Also, regarding Companies House, as quite a few students could be affected and probably lose money if/when the company is struck off, do you think the university could make an application to Companies House to suspend the strike off until monies are reclaimed? Who would be successful at preventing strike off?

Cannot advise re strike off, but I don't see what the university has to do with it.

However, you say

"the AST agreement says,"A deposit of £2250 is payable on signing this agreement. The tenant pays the deposit as security for the performance of the tenants obligations....etc"

and, as I said, the tenancy contract is between LL and T, not agent and T. The agent has taken the deposit money on behalf of the LL. Any claim for a refund of the deposit should be made against the LL.

[ram]

do you think the university could make an application to Companies House to
suspend the strike off until monies are reclaimed?

PLEASE, you have been told 3, if not 4 times to forget Companies
house.
ONLY the firm can pay the fines, or adhere to the law to prevent
being struck off.
Companies house is just a data recording company, not a court,
they just record what a firm does, and to ensure a company follows
the laws, all they do is fine for late receipt of information.

They have to obey their own laws. No accounts submitted within
the time frame, they fine, if fine not paid, they quadruple the fine,
but advise you they will strike you off if accounts / or whatever
are not submitted in a certian time frame, and after that, they will
be stuck off.

I know you are trying to "get them" via any means possible, but via
Companies house is a "none starter".

R.a.M.

[TMC]

Hi thanks again for responses.

Yes, thanks westminster, I am clearer now about LA acting for LL so any claim will need to be against LL and that I need not worry so much about LA disappearing overnight (with regard to the other students deposits).

And, ram, I promise not to mention Companies House again ;-) Your explanation of how they work makes it clearer as to why they are a 'none starter', thanks.

I know I am like a 'dog with a bone' over this - I want to help resolve things for my son and his friends and, also, if in doing so I can prevent any other students and their families from having to deal with these issues then I might just feel that all the stress has been worthwhile. It has been going on for 6 weeks and hung over us like a black cloud - perhaps in a way that seems out of proportion to those dealing with these issues on a daily basis.

I feel as though I have spent these past few weeks taking a correspondence course in Landlord and Tenant Law.

Joking aside, I don't know where we would be without your advice and explanations, and that you have stuck with me through this saga and noted all the relevant details - really appreciated, and, once again, thank you.

[Lawcruncher]

I was asked to comment on this. Has the problem been resolved?