I have used the Rent Now service for every property I’ve re let for the past year and it’s pretty much perfect BUT I don’t think I will again unless I know this issue I have encountered can not happen again.
I advertised my property as usual and got a lot of interest.
I met all prospective tenants at the house and selected a young couple who were very pleasant and so I progressed with all checks and references. All came back fine so I agreed to let them rent the house.
Move in date was agreed for 27th October 2023 and arrangements were made.
On 27th October I got the email from Openrent to say DO NOT release the keys as they hadn’t received the rent. The tenants also used the Reposit scheme despite insisting they had the deposit in full. At this point I was getting very bad vibes so contacted Openrent to say I did not wish to proceed. I have been a landlord for 23 years and even had my own letting agency. We did not sign any paperwork until the money was cleared through our account.
After 4 days of the tenants not paying I was very concerned. They were asking for the keys etc and I firmly said no. In the end they made the payment and I was forced to release the keys.
I received no rent after that until I made an application for direct payments from UC (he is working but she gets help). They have not made the top up payments and I have tried to offer multiple payment plans etc to help them.
I’ve now issued S21 and S8 and started MCOL. I will hopefully be able to recover most of the arrears through the Reposit scheme and am hoping they just move out before I am forced to go to court.
The moral of the story being that I think I will now have to go back to the old way of doing all the paperwork myself and just use the advertising aspect of Openrent. It’s a shame as I love the ease of using the Rent Now scheme.
It’s just the way the process works that I would want to avoid happening again. I don’t think they’ve really done anything wrong per se but by signing the contract before securing the rent and deposit, I basically ended up with a tenancy where they hadn’t paid a penny yet I couldn’t back out. I knew at that point that they were going to be a nightmare - and they are. The way I’ve always done it and it has worked for me for 20 years plus, is I insisted the monies were all confirmed and in the bank before the contract was signed and keys handed over. I generally did this at the property. I have been using Openrent as I like how everything is all accessible from dashboard etc. It’s great. But in this particular situation, it highlighted that by signing the contract without confirming rent is in place, it very dangerous and I’m now dealing with very difficult tenants that I’m going to probably have to take to court.
If I had just done everything myself, I’d have seen the danger and the fact they were likely to be problematic down the line, I’d have pulled the plug.
Under the Tenant Fees Act 2019, any money taken prior to the signing of an agreement is treated as a holding deposit. Holding deposits are limited to one week’s rent. This means that agents and landlords cannot ask a tenant to pay their tenancy deposit and/or first month’s rent before the contract has been signed
That’s the issue I think. But it opens us up to getting shafted if they don’t then pay. I’m not sure there’s a way around it other than do it the way I always have and not use the Rent Now process.
As I said, it’s not that Openrent have done anything wrong, but I won’t trust to use it again in the future after the way things have turned out with this particular tenancy. As much as I’d prefer not to, I think I will either only accept cash or a bank transfer in person at the property. I may get a Sum Up device or something. I just can’t risk this again.
I think holding deposits are a potential trap so I have always made it clear in adverts etc. that they are not accepted and if any are paid they will be returned and the application will be declined. I agree that the order in which things are done is crucial and for what it’s worth my procedure is set out on the attachment. I always deal with the procedure in a place with good internet access. If it’s at the letting I bring a folding table and chairs. The procedure is very rigid and I make no exceptions. But of course i won’t know if it’s watertight until it goes wrong and ends up in court! Hasn’t happened yet.
