Q&A: Should I pay rent to my landlord or an agent?

Q: “I live in a rented property and, until now, have always paid my rent direct to the landlord. I recently received a letter from an estate agent saying that from now on, I should pay my rent to them, and that the property may be repossessed when my tenancy ends in August.

“I phoned the agent to query it and they told me that although the landlord still technically owns the property, he has no right to collect rent because of debt he owes on the property. I then spoke to my landlord, who said that the agent is lying and that I should continue to pay rent directly to him. What should I do?”

A: “This situation may have arisen because your landlord’s mortgage company has appointed a receiver. Alternatively, your landlord may have defaulted on the rent that it pays to its own landlord (your superior landlord).

“A letter from an estate agent asking for you to pay your rent to them is not sufficient. You should contact the agent to find out what has happened. If a receiver has been appointed, the agent should send you the Notice of Appointment as well as evidence that the receiver has the power to require you to pay your rent to him. If your landlord is in default to his landlord, the agent needs to serve you with a Section 6 Notice, which is a formal notification that you should pay future rent to them.

“If, on receipt of further information, you decide to pay future rent to the agent, you should write to your landlord to notify him of your decision, and state that your rent payments to the agent are in full and final settlement of your liability to pay rent under the tenancy.

“Both your superior landlord and the mortgage company can bring possession proceedings against you – but your superior landlord loses this right if you pay your rent to the agent. The mortgage company loses this right if either your tenancy predated the mortgage or the company had consented to the tenancy. It would take several months for either your superior landlord or the mortgage company to obtain a possession order from the Court.

“You should also consider whether you have any right to remain after the tenancy expires. If the annual rent is £100,000 or less and you are not in breach of the tenancy, you will only have to leave if you have been served with a Section 21 Notice giving you at least two months to vacate, and the deadline in that Notice has expired. Otherwise, your tenancy will continue past August.”

Answered by Scott Goldstein, a Solicitor in the Property Litigation team at Howard Kennedy (HowardKennedy.com).