Wednesday, November 6, 2024
Dale James is a specialist HF Assist Advisor to letting agents in the private rented sector. With over 25 years’ experience in lettings, there’s not much that Dale doesn’t know about supporting landlords, agents and tenants through tricky tenancies and the ever-changing legislative landscape of the private rented sector.
Here, Dale shares his answers to some recent actual helpline cases raised by agents calling HF Assist’s helpline.
Q. In Wales I have a periodic occupation contract now and I want to get a rent increase. I have heard a written statement should be given to the tenant about the rent increase. How should I go about this?
A. The process involves serving an RHW12 notice with two months’ notice and thankfully the notice itself will serve as the written statement of the variation. Contracts converted from AST agreements retain the right to appeal to the Residential Property Tribunal but occupation contracts for new occupations since December 2022 will have no access to the appeal process.
Q. My landlord has passed on last week, who do I work for now?
A. The agent at this moment will have no management contract and should not carry out any further work until someone steps forward as an executor for the deceased’s estate. If you do continue management, you will be continuing as an ‘Agent of Necessity’ and will not have any terms of business in place and so cannot even claim commission. It is essential to get an executor signed up on your terms of business as soon as possible.
Q. My landlord client is refusing to pay a contractor’s invoice. The contractor is now asking the agency to pay, what is the situation here?
A. If the contractor’s invoice is made out to the agency name then the agency can be held liable for the payment. All contractors’ invoices should be made out to your landlord’s name and you should always instruct the work very specifically ‘for and on behalf of Mr Landlord’ thus disclosing the agency relationship at the start of the project. If you do this then the contractor must pursue the landlord direct for his/ her invoice payment. You should also check your terms of business to see if the landlord has signed to indemnify the agency for any work instructed or carried out in good faith on the landlord’s behalf and point that out to the landlord.
Q. One of our landlords is saying that because we chose our contractor for the bathroom replacement and ‘it was not done to an acceptable standard’ the agency must refund some of the money paid for the job. We have paid our contractor already.
A. See above for the method of instructing contractors to limit the agent’s liability. In this instance the landlord is holding the agency ‘vicariously liable’ for the substandard job. The same applies – this will come down to the name on the invoice – if it’s the agency then it’s very likely the landlord will be able to claim from the agency. Obviously if the agency is the actual employer of their own contractor the agency will be held responsible.
Q. I showed a prospective tenant around a lovely flat we had for let and she was very enthusiastic and wanted to go ahead straight away. I gave her our details and application form and to my surprise by the time I got back to the office the first week’s rent was in my client account. I sent out the Holding Deposit Agreement and she sent it back signed immediately. The references were all good and I was preparing to go to the next stage and she then informed me 10 days after the money was received for the holding deposit that she was dropping out. Obviously, I said that the holding deposit was going to be forfeited as she was dropping out. She said after talking with Trading Standards in the local authority that as the money was paid to me four hours before the holding deposit agreement was signed, that she must be repaid the holding deposit. Now Trading Standards are saying the same and threatening me with a £4000 fine if I do not pay it back.
A. As annoying as this is for the agent and landlord, they are correct, and the money must be repaid. The money cannot be taken until the prospect has signed and agreed the holding deposit agreement. The local authority are adamant that they will be willing to go all the way because of the four hours’ delay.
Q. We signed up a landlord and within 10 days managed to secure a let and move in a tenant. We were super pleased, but then the landlord sent us a letter claiming that he was claiming his right to change his mind under the distance selling regulations, he is pleased to keep to the contract with the new tenant but will not pay us our fees. Help!
A. He would normally be correct in his claim as we see that the terms of business were signed up ‘off premises’ but we are very happy to confirm that he had actually ticked the box on those terms of business where he ‘expressly waived his right to the distance selling rights and instructed you to continue with immediate effect’. You have a contract with the landlord and your fees can be enforced – if he wants to end the contract with you, he must use the notice period on your terms of business which I see includes immediate notice is possible with payment of all fees so far and three months’ commissions in lieu of future management. This shows it’s essential when most terms of business are off premises to include an express waiver of distance selling rights.
Q. We have a landlord who has come to us because he is having trouble with his tenants. If we help him out with this one, he will think of giving us the rest of his portfolio. This is in Wales. He has not protected the deposit, not completed a written statement of the conversion, served an RHW16 notice with six months’ notice two months ago, rent is up to date and set up a new fixed term occupation contract for 12 months six months ago.
A. Oh dear! A written statement of conversion must still be done, the deposit means that the RHW16 is void and he may have to withdraw it now it’s past two months’ notice time . The lack of the written statement of conversion and the withdrawal of the RHW 16 will mean that he will have to wait another six months before he will be able to serve another six months’ notice but even then that will be invalid unless he can refund the deposit to the tenant before serving. The tenants will claim the default two months’ rent refund for the lack of a written statement and probably try to double that with a court order. Also, depending upon the dates a RHW16 cannot be served within a fixed term anyway. I would say that the landlord can get himself back on track but it will take over a year and you will only help him if you are paid for the service. Dangling the carrot of future business never really works with this timescale and my goodness, what will the rest of the portfolio look like!
The HF Assist helpline provides practical expert guidance and information from call handlers who have both legal and lettings experience, making sure you are informed and prepared for the day-to-day challenges of running your business. Upgrading to an HF Assist Premium subscription provides a 24/7 helpline covering all types of legal issues relating to a letting agent’s business, as well as access to a resources library with useful guides, documents and legal templates. For more information visit the HF Assist website.
