Do Property Lettings Companies have Cash Flow Problems?
Do Property Lettings Companies have Cash Flow Problems?
Author
Discussion

KevJ

Original Poster:

36 posts

234 months

Tuesday 12th August 2008
quotequote all
Hi,

To cut a long story short I'm moving into a new place on 30th August, I agreed the rent terms with the letting agent mid/late July and paid the £160 fee for references,etc. They have asked for the deposit and 1st months rent (£1500) to be paid before the move in date. When asked how long before the move in date they said at the latest 4 days before.

Without being tight I really don't see why they should have quite a large chunk of my money before they need it, however they have called me 4 times now to try and arrange payment transfer.

Now if this is normal then fine, no problems. But it just rang alarm bells in my head, why are they chasing monies that aren't even due yet?

Is this normal?

anonymous-user

84 months

Tuesday 12th August 2008
quotequote all
I imagine they need to make sure that the funds clear before they give you the keys.

n1ckm

187 posts

258 months

Tuesday 12th August 2008
quotequote all
This is definitely the case. Keys cannot be released before cleared funds are confirmed.

Ian V

1,817 posts

298 months

Tuesday 12th August 2008
quotequote all
Davros79 said:
I imagine they need to make sure that the funds clear before they give you the keys.
Exactly right. As a landlord myself, I wouldn't be happy if my letting agent hadn't got cleared payment before handing out the keys.

KevJ

Original Poster:

36 posts

234 months

Tuesday 12th August 2008
quotequote all
Hi Davros,

I am sure they do. Hence needing the funds at least 4 days prior to the move.

However we are currently 17/18 days before and I have today recieved the 4th phone call from them about it!

It concerns me that they seem almost desperate for it?

wolves_wanderer

12,957 posts

267 months

Tuesday 12th August 2008
quotequote all
KevJ said:
Hi Davros,

I am sure they do. Hence needing the funds at least 4 days prior to the move.

However we are currently 17/18 days before and I have today recieved the 4th phone call from them about it!

It concerns me that they seem almost desperate for it?
Stick to your guns and pay it 4 days before or drop it in as cleared funds (ie cash) when you pick the keys up. There is no justification for them having it any sooner.

anonymous-user

84 months

Tuesday 12th August 2008
quotequote all
Getting money in the bank as early as possible is a priority for any business, can't blame the agent for trying!

scotal

8,751 posts

309 months

Tuesday 12th August 2008
quotequote all
Perhaps they are used to having problems because people "forget" tot transfer the funds in time.
If you are comfortable with transferring the money across, set it up with yoour bank to arrive on the required date, tell the agent its done, or take it in in cash on the due date.

Have you checked with the agent as to the tenancy deposit scheme etc?

minimax

11,985 posts

286 months

Tuesday 12th August 2008
quotequote all
KevJ said:
Hi,

To cut a long story short I'm moving into a new place on 30th August, I agreed the rent terms with the letting agent mid/late July and paid the £160 fee for references,etc. They have asked for the deposit and 1st months rent (£1500) to be paid before the move in date. When asked how long before the move in date they said at the latest 4 days before.

Without being tight I really don't see why they should have quite a large chunk of my money before they need it, however they have called me 4 times now to try and arrange payment transfer.

Now if this is normal then fine, no problems. But it just rang alarm bells in my head, why are they chasing monies that aren't even due yet?

Is this normal?
absolutely normal, I run a lettings agency (among other things smile) and I will not let keys out the door without cleared funds sitting there for 3 days (to avoid a cheque being recalled) or cash in my safe. it's just common sense from the letting agent, nowt to worry about dear boy smile

and regardng whether they have cash flow problems, extremely doubtful, for as there are always businesses in trouble, the lettings market is booming at the moment so they should be rolling in it smile

if you have any queries about regulations or procedure, feel free to pm me and i'll be happy to help you out smile

KevJ

Original Poster:

36 posts

234 months

Tuesday 12th August 2008
quotequote all
minimax said:
KevJ said:
Hi,

To cut a long story short I'm moving into a new place on 30th August, I agreed the rent terms with the letting agent mid/late July and paid the £160 fee for references,etc. They have asked for the deposit and 1st months rent (£1500) to be paid before the move in date. When asked how long before the move in date they said at the latest 4 days before.

Without being tight I really don't see why they should have quite a large chunk of my money before they need it, however they have called me 4 times now to try and arrange payment transfer.

Now if this is normal then fine, no problems. But it just rang alarm bells in my head, why are they chasing monies that aren't even due yet?

Is this normal?
absolutely normal, I run a lettings agency (among other things smile) and I will not let keys out the door without cleared funds sitting there for 3 days (to avoid a cheque being recalled) or cash in my safe. it's just common sense from the letting agent, nowt to worry about dear boy smile

and regardng whether they have cash flow problems, extremely doubtful, for as there are always businesses in trouble, the lettings market is booming at the moment so they should be rolling in it smile

if you have any queries about regulations or procedure, feel free to pm me and i'll be happy to help you out smile
Excellent. Thank you very much both for your advice and your quick reply!

minimax

11,985 posts

286 months

Tuesday 12th August 2008
quotequote all
wolves_wanderer said:
KevJ said:
Hi Davros,

I am sure they do. Hence needing the funds at least 4 days prior to the move.

However we are currently 17/18 days before and I have today recieved the 4th phone call from them about it!

It concerns me that they seem almost desperate for it?
Stick to your guns and pay it 4 days before or drop it in as cleared funds (ie cash) when you pick the keys up. There is no justification for them having it any sooner.
...and risk losing the property.

- because he won't have signed the contract yet as he's not given the deposit and 1st rent.. and if I had an applicant who was being silly over 12/13 days and seeming like he wasn't committed to the property or my landlord (my client, of course smile) then i'd instruct the negs to start viewing it again as it would be looking shaky..

this is somewhere for someone to live, it needs to be secured for them otherwise the lettings agent will do their job (and this is the important part, as so many people forget agents do not work for the applicant and at no stage are they required to or should have their interests forefront) and get some back up tenants ready, perhaps even get more money for the landlord - as this is what they are employed to do.

the correct response, it to not stand upon ceremony and do what the agent asks, then the property is secure and everyone breathes easily..

the lettings neg is probably just trying to tie up his deal and get it banked, commendable, in my view - you need to be on top of your applicants otherwise deals fall through smile

it's perhaps harsh, but it's fair. when apps start paying my fees i'll start considering their best interests smile

Plotloss

67,280 posts

300 months

Tuesday 12th August 2008
quotequote all
minimax said:
wolves_wanderer said:
KevJ said:
Hi Davros,

I am sure they do. Hence needing the funds at least 4 days prior to the move.

However we are currently 17/18 days before and I have today recieved the 4th phone call from them about it!

It concerns me that they seem almost desperate for it?
Stick to your guns and pay it 4 days before or drop it in as cleared funds (ie cash) when you pick the keys up. There is no justification for them having it any sooner.
...and risk losing the property.
If the letting agent has stated 4 days and consequently re-lets the property after a deal has been verbally agreed because a prospective tenant did not agree to part with funds prior to those 4 days then I would have thought that they would leave themselves wide open to be liable for compensation for any losses incurred by the prospective tenant in respect of the planned move.

It may be good practice from an agent point of view, however, if they need the money prior to the agreed 4 days then they should have stated that clearly from the outset.

Edited by Plotloss on Tuesday 12th August 10:36

wolves_wanderer

12,957 posts

267 months

Tuesday 12th August 2008
quotequote all
minimax said:
wolves_wanderer said:
KevJ said:
Hi Davros,

I am sure they do. Hence needing the funds at least 4 days prior to the move.

However we are currently 17/18 days before and I have today recieved the 4th phone call from them about it!

It concerns me that they seem almost desperate for it?
Stick to your guns and pay it 4 days before or drop it in as cleared funds (ie cash) when you pick the keys up. There is no justification for them having it any sooner.
...and risk losing the property.

- because he won't have signed the contract yet as he's not given the deposit and 1st rent.. and if I had an applicant who was being silly over 12/13 days and seeming like he wasn't committed to the property or my landlord (my client, of course smile) then i'd instruct the negs to start viewing it again as it would be looking shaky..

this is somewhere for someone to live, it needs to be secured for them otherwise the lettings agent will do their job (and this is the important part, as so many people forget agents do not work for the applicant and at no stage are they required to or should have their interests forefront) and get some back up tenants ready, perhaps even get more money for the landlord - as this is what they are employed to do.

the correct response, it to not stand upon ceremony and do what the agent asks, then the property is secure and everyone breathes easily..

the lettings neg is probably just trying to tie up his deal and get it banked, commendable, in my view - you need to be on top of your applicants otherwise deals fall through smile

it's perhaps harsh, but it's fair. when apps start paying my fees i'll start considering their best interests smile
I take your point and imagine you are dealing with a different market than the one I used to rent in. Here there is quite a large oversupply so it would be pretty easy to find another place even at v. short notice.

KevJ

Original Poster:

36 posts

234 months

Tuesday 12th August 2008
quotequote all
Interesting hypothetical, but I've got my answer now so I'm off! smile

mel

10,168 posts

305 months

Tuesday 12th August 2008
quotequote all
But is the Agency a combined letting & estate? If it is then although the letting market is "booming" as minimax says, the estate side is flat on it's arse rolling around gasping like a 35 stone chain smoking 50 year old having a cardiac. In other words it's perfectly possible that one side of the business is proping the other up, in which case I'd be very concerned about the security of your deposit & the passing on of rent to the landlord. Lets face it when any company has got it's arse firmly against the wall they will do anything they can to generate cash and you're dealing with an industry that hasn't got the best reputation for moral values.

minimax

11,985 posts

286 months

Tuesday 12th August 2008
quotequote all
Plotloss said:
minimax said:
wolves_wanderer said:
KevJ said:
Hi Davros,

I am sure they do. Hence needing the funds at least 4 days prior to the move.

However we are currently 17/18 days before and I have today recieved the 4th phone call from them about it!

It concerns me that they seem almost desperate for it?
Stick to your guns and pay it 4 days before or drop it in as cleared funds (ie cash) when you pick the keys up. There is no justification for them having it any sooner.
...and risk losing the property.
If the letting agent has stated 4 days and consequently re-lets the property after a deal has been verbally agreed because a prospective tenant did not agree to part with funds prior to those 4 days then I would have thought that they would leave themselves wide open to be liable for compensation for any losses incurred by the prospective tenant in respect of the planned move.

It may be good practice from an agent point of view, however, if they need the money prior to the agreed 4 days then they should have stated that clearly from the outset.

Edited by Plotloss on Tuesday 12th August 10:36
quite so, and if the agents did not state their requirement for funds in then I would call that incompetence - responsibilities for both sides should be stated on the receipt form for the holding deposit given when the offer is tied..

I don't mean that the agent can ride roughshod over the fellow I just wanted to point out a few things smile

minimax

11,985 posts

286 months

Tuesday 12th August 2008
quotequote all
wolves_wanderer said:
minimax said:
wolves_wanderer said:
KevJ said:
Hi Davros,

I am sure they do. Hence needing the funds at least 4 days prior to the move.

However we are currently 17/18 days before and I have today recieved the 4th phone call from them about it!

It concerns me that they seem almost desperate for it?
Stick to your guns and pay it 4 days before or drop it in as cleared funds (ie cash) when you pick the keys up. There is no justification for them having it any sooner.
...and risk losing the property.

- because he won't have signed the contract yet as he's not given the deposit and 1st rent.. and if I had an applicant who was being silly over 12/13 days and seeming like he wasn't committed to the property or my landlord (my client, of course smile) then i'd instruct the negs to start viewing it again as it would be looking shaky..

this is somewhere for someone to live, it needs to be secured for them otherwise the lettings agent will do their job (and this is the important part, as so many people forget agents do not work for the applicant and at no stage are they required to or should have their interests forefront) and get some back up tenants ready, perhaps even get more money for the landlord - as this is what they are employed to do.

the correct response, it to not stand upon ceremony and do what the agent asks, then the property is secure and everyone breathes easily..

the lettings neg is probably just trying to tie up his deal and get it banked, commendable, in my view - you need to be on top of your applicants otherwise deals fall through smile

it's perhaps harsh, but it's fair. when apps start paying my fees i'll start considering their best interests smile
I take your point and imagine you are dealing with a different market than the one I used to rent in. Here there is quite a large oversupply so it would be pretty easy to find another place even at v. short notice.
when the market is oversupplied the lettings neg will try harder but you'll be in a better position as an app to tell them to fvck off winkhehe

Andy M

3,755 posts

289 months

Tuesday 12th August 2008
quotequote all
Hmmm...I thought that taking deposits was a bit dodgy these days? Instead landlords have to take out insurance, which the tenant pays?

vinnie83

3,367 posts

223 months

Tuesday 12th August 2008
quotequote all
my ****EX**** letting agent took my property off the market so to speak, because they 'had a tenant' and did exactly what you say SHOULD be done, and only asked for deposit on picking up keys... guess what.... house off market for over a month, no viewings, and tenant doesn't turn up to pick keys up....

Me, the Landlord, 700 quid out of pocket (months rent) and house un advertised for over a month, due to them not asking for the deposit sooner...

does that answer your question?

minimax

11,985 posts

286 months

Tuesday 12th August 2008
quotequote all
mel said:
But is the Agency a combined letting & estate? If it is then although the letting market is "booming" as minimax says, the estate side is flat on it's arse rolling around gasping like a 35 stone chain smoking 50 year old having a cardiac. In other words it's perfectly possible that one side of the business is proping the other up, in which case I'd be very concerned about the security of your deposit & the passing on of rent to the landlord. Lets face it when any company has got it's arse firmly against the wall they will do anything they can to generate cash and you're dealing with an industry that hasn't got the best reputation for moral values.
I agree with all the above hehe

and have a rofl for the imagery too biggrin

the deposit will be safe as it goes directly to the tenancy deposit service which is a govt organisation so no worries there, but the 1st months rent could easily go up the swanny along with the holding deposit (usually kept in-house) which can be deducted from any reference fees applicable.. or put in the wallet of an unscrupulous agency owner I suppose too!

I think best way to avoid problems or minimise risk thereof is to follow your instincts.. if they look dodgy (ok, more dodgy than usualbiggrin) then don't use them.. chances are in this market the property you're interested in is on with 3 other agents also, one of which may not be dodgy winkhehe

Edited by minimax on Tuesday 12th August 11:27