The Estate Agency ACT
Discussion
I have a client we are collecting £6000 from a letting agent. The Letting agent collected rent from my client's tenants and spent it. None of the money was used in connection to the property, it was used to service other personal debts.
Am I right in thinking that said letting agent has committed a criminal offence under the Estate agency / agents ACT as he failed to have the rent paid into a seperate client account and used the rent for personal purposes?
Am I right in thinking that said letting agent has committed a criminal offence under the Estate agency / agents ACT as he failed to have the rent paid into a seperate client account and used the rent for personal purposes?
I am sure he should have a separate clients' bank account for such funds. He should also have a separate clients' ledger account so he can ascertain at any given time how much he owes or is owed by his clients.
I am sure such requirements go back many years. I remember preparing estate agents' accounts 20 years ago where the various client bank accounts and client account balances had to be reconciled.
I am sure such requirements go back many years. I remember preparing estate agents' accounts 20 years ago where the various client bank accounts and client account balances had to be reconciled.
If you have no luck with us PH lot, ask the question at www.taxationweb.co.uk/forum
They have a panel of tax experts (the moderators) but there's every chance they, or members, can answer this for you.
Hope this helps
They have a panel of tax experts (the moderators) but there's every chance they, or members, can answer this for you.
Hope this helps
Rents collected on behalf of clients should be paid over to the landlord as soon as practicable. The only deductions taken from the rents collected would be fees and commissions (plus VAT) charged by the letting agent as set out in the initial contract.
As Plotloss said, retaining the landlord's rent and then spending it is tantamount to straightfoward robbery and fraud. However, proving that this is REALLY what happened might be difficult in a court of law.
A threat to bring an action under the contravention of Estate/Letting Agents regulations might be a better bet - at least initially.
As Plotloss said, retaining the landlord's rent and then spending it is tantamount to straightfoward robbery and fraud. However, proving that this is REALLY what happened might be difficult in a court of law.
A threat to bring an action under the contravention of Estate/Letting Agents regulations might be a better bet - at least initially.
Gents, My client has already got judgement against the letting agent and a writ of writ of Fieri Facias. We have only just taken the case on to enforce collection.
I spoke to the letting agent yesterday and he admits that yes he spent the rent money to service personal debts. He then went on to say I cant touch him which was bizarre as I have a lot of remedies at my fingertips ie stat demand leading to his bankruptcy, seizure of goods etc.
When I mentioned I may advise my client to start criminal proceedings against him he folded and gave me a sob story about a nervous breakdown.Which leads me to suspect he was already aware that what he was doing was illegal. Could walk it though under grounds of diminished responsibility.
I spoke to the letting agent yesterday and he admits that yes he spent the rent money to service personal debts. He then went on to say I cant touch him which was bizarre as I have a lot of remedies at my fingertips ie stat demand leading to his bankruptcy, seizure of goods etc.
When I mentioned I may advise my client to start criminal proceedings against him he folded and gave me a sob story about a nervous breakdown.Which leads me to suspect he was already aware that what he was doing was illegal. Could walk it though under grounds of diminished responsibility.
Dont think the EA Act applies to letting Agents. ie non selling agents
As far as Im aware there is no legal requirement to hold funds in a client account, (as opposed to what is good practice) only to pay on demand the deposit back.
Clearly there is no entiltlement to hold onto rent money.
The deposit if held by the agent should be in a client a/c but pretty sure it doesnt have to be. LA dont have to belong to any trade bodies.
As far as Im aware there is no legal requirement to hold funds in a client account, (as opposed to what is good practice) only to pay on demand the deposit back.
Clearly there is no entiltlement to hold onto rent money.
The deposit if held by the agent should be in a client a/c but pretty sure it doesnt have to be. LA dont have to belong to any trade bodies.
If they are letting agents only check if they are a member of the ARLA.
www.arla.co.uk/search/search.asp
They have guidelines for companies to operate to but they are not bound by law only to be a member of there organisation.
Steve
www.arla.co.uk/search/search.asp
They have guidelines for companies to operate to but they are not bound by law only to be a member of there organisation.
Steve
superlightr said:
Just to clarify;
So you have judgment for the sum of money owing, and you are looking to enforce payment.
also
you are looking as to what else you can get them for?
So you have judgment for the sum of money owing, and you are looking to enforce payment.
also
you are looking as to what else you can get them for?
Wrong. We are only looking to enforce payment. If they pay thats the end of the matter. Obviously we would never threaten to start criminal proceedings against them if they dont pay, because that may been seen as blackmail, intimidation etc.
jamesuk28 said:
superlightr said:
Just to clarify;
So you have judgment for the sum of money owing, and you are looking to enforce payment.
also
you are looking as to what else you can get them for?
So you have judgment for the sum of money owing, and you are looking to enforce payment.
also
you are looking as to what else you can get them for?
Wrong. We are only looking to enforce payment. If they pay thats the end of the matter. Obviously we would never threaten to start criminal proceedings against them if they dont pay, because that may been seen as blackmail, intimidation etc.
Any legal action such as reporting them to the police/estate agents act so long as legal is mearly leverage I would suggest. Indeed I would/have put pressure/contemplation of further action on some people to get the correct result if they dont play ball. But I stop doing law a long time ago.....(apart from my own/business use)So I would bow to your uptodate knowledge.
james i really don't think this could be considered blackmail.
Just send them a copy of the letter you are going to send to the relevant bodies, stating that they have been trading illegally, and attach a note saying you thought you would keep them abreast of the situation. That should buck them up.
it's not blackmail if they have been doing something illegal which they have been caught for!
Just send them a copy of the letter you are going to send to the relevant bodies, stating that they have been trading illegally, and attach a note saying you thought you would keep them abreast of the situation. That should buck them up.
it's not blackmail if they have been doing something illegal which they have been caught for!
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