Emmalouise Posted July 10, 2007 Report Share Posted July 10, 2007 Hello I am in a situation where my estate agent that was dealing with the management of my letting has gone out of business, i had a letter from them advising me. However, they hold a months rent which my tenant paid and also the deposit money which they have failed to register. I cant seem to find them anywhere, the office is clear and the phones are cut off. They dont seem to be registered with any of the organisations such as ARLA, i have tried them all, plus the Ombudsman, and Trading standards, i have issued a report with the police also! The only thing i can now think of doing is to post a letter through the office door and maybe put a note on the door to see if anyone is in the same boat? I am at a loss what to do, can anyone offer me any advice? i.e am i liable to pay the deposit back to the tenant even though i never held it in the first place? Thank you very much. Link to comment Share on other sites More sharing options...
Trenners Posted July 10, 2007 Report Share Posted July 10, 2007 Hi Emmalouise, What a disaster! Regarding the tenant's Security Deposit - I believe you will be liable to repay them their money as the Estate Agent was holding the money on your behalf. A reputable agent would hold the deposit money in a separate, client, account - so even if their business was to go bust they would not compromise any of their clients money. If the agent was not a member of ARLA, UK ALA etc then it is possible that they kept the deposits in the own Business Account meaning that this money has been lost at the point of them going bust. You will need to repay the tenant and then try and sue the estate agent, in the County Court, for the money that you have lost. A lesson to be learnt here as well - only use estate agents / lettings agents that belong to regulatory bodies such as UK ALA, ARLA etc etc Good luck, Mark Link to comment Share on other sites More sharing options...
Melboy Posted July 11, 2007 Report Share Posted July 11, 2007 Personally I wouldn't feel liable or willing to repay the Tenant's lost deposit if the EA had done a runner with the Dosh. Hardly my fault or responsibility is it? I think the Tenant would and should have to sue the EA for his/her money back rather than the Landlord. Mel. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted July 11, 2007 Report Share Posted July 11, 2007 Harsh for the tenant but i agree with Mel ...you never had it ........so how can you be expected to repay it ! although i dont know where you stand legally with it ......... Simon Link to comment Share on other sites More sharing options...
Trenners Posted July 11, 2007 Report Share Posted July 11, 2007 Hi all(again), I disagree with both Melboy and rodent. The tenant gave the letting agent (who was acting for the LANDLORD) the Security Deposit. The Landlord was the client of the letting agent (not the tenant). The Letting Agent was holding the deposit as stakeholder, presumably, for the Landlord. I think it would be really unfair if the tenant suffers because the letting agent (that the landlord chose) runs off with their money. Additionally, the tenancy agreement will be between the landlord and the tenant (and not the letting agent and the tenant) so the landlord is responsible for ensuring that the deposit is returned to the tenant. Finally - with the new deposit regulations in place - it is the landlord's responsibility to ensure that the tenant's deposit is protected and _not_ the letting agents responsibility. In other words - if your letting agent doesn't protect your tenant's deposit money then the landlord will be fined .... not the letting agent! Back to my old ways again I'm afraid ..... disagreeing with Melboy and Rodent ! Mark Link to comment Share on other sites More sharing options...
Melboy Posted July 11, 2007 Report Share Posted July 11, 2007 So, the EA/ LA runs off with the money and woops it up on illegal and dishonest gains and the Landlord who has not committed any illegal act pays the cost?! Yeah! Right! Blood and Stone comes to mind on this one. I doubt whether a Court in the Land would agree with you on this one Mark. Must ask my Solicitor when I see him. Mel. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted July 11, 2007 Report Share Posted July 11, 2007 Aye , over my dead body ............................... Simon Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted July 11, 2007 Report Share Posted July 11, 2007 Mark , We have a good long list of reason not to use a Letting agent, here is another good one you have identified.... Can you think of any more.... I can, but we have several(agents) on here helping to reinforce are opinions and pointing out yet more reasons not to relinquish the control of our "Crown Jewels"..... Completely typical agent response " sorry mate - thats life" I just collect the money, not take resonsibility or really sort problems!! comments welcome Simon If the agent had passed the money to the LL that would be a completely different matter......... Possession is 9/10ths of the law ............. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted July 11, 2007 Report Share Posted July 11, 2007 Another thought .. The LA is employed by the LL to collect the rent ...so when he fails to do so, presumably with the above logic .......the LA is liable to cover this cost from his own funds .......even of this were the case - I WOULD STILL SELF MANAGE !!!!!!!!!!!!!!!!!LOL J4L is going to have to have something to say here as well i expect..................Gareth ....Mark............................. Simon Link to comment Share on other sites More sharing options...
Melboy Posted July 11, 2007 Report Share Posted July 11, 2007 Mark ....the last Agent in Swindon (and I recollect another case in Portsmouth as well) who ran off with deposit money was brought to justice and prosecuted. Don't remember that there was a requirement for the Landlord's to be present though. I do accept the fact though that if the LA belongs to the ARLA then the bond /deposit/rent money was/is protected up to £10,000. I would imagine the rogue LA would have a sticker in the window anyway? bit like the "Federation of Master Builder's" sticker you see on Trannies that are falling apart and belching smoke from a clapped out engine akin to the vans occupants I suspect. Mel. Link to comment Share on other sites More sharing options...
GPEL Posted July 11, 2007 Report Share Posted July 11, 2007 I think a better understanding of the definition of stakeholder is required. If the agent is stakeholder, they hold deposits in a quasi-trust on behalf of both the landlord and tenant. If the agent does a bunk, the landlord may also be disadvantaged as there is no fall-back if the property is damaged. Also the Law of Agency comes in to play. Notwithstanding this, I don't see one rogue agent's activities as a reason to knock all. Due diligence once more rears its head. Make sure the deposit is protected in a bonded client account and the company is registered with NALS or someone similar. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted July 11, 2007 Report Share Posted July 11, 2007 We had a case in Cardiff, some years ago now, when a fairly large agent went thru, taking thousands of student bonds with it - there was no demand on LL on that occasion. With new TDS this all becomes academic ,as it is in scheme, it is safe. If however, a LA does not protect a bond, then LL should make sure that the agreement with the LA requires LA to take responsibility for such and cover any penalty due should he fail to do so............ I have just had a bit of a "disagreement" with a local LA who let one of my props (on let only) took a bond and 1 mths rent - the rent and ast were fowarded to me .............but not the deposit....when i called to see where my bond was they had taken it in cash and put it in the custodial scheme (which i do not use ....!!) Worse still,refused to give it to me until i had proved to them that i had protected it ?????????? Nope, i couldn't work that one out either - how am i supposed to protect it if i havent had it ?? ( i could under ins scheme but wasn't prepare to, until i had it in my possession) to cut a long story short They finally agreed to hand it over... Reason cited was that they would be liable as they had taken the deposit and issued a receipt to that effect. So perhaps this one needs clarifying here, as to exactly who is now responsible ,and liable under new TDS rules.. Personally if the moon does turn pink and green and i start using an agent to "manage" i would make very sure that the agent took full resposibility, within the LL/LA agreement for this, I suggest anyone using management services checks this asap........... Simon Link to comment Share on other sites More sharing options...
GPEL Posted July 12, 2007 Report Share Posted July 12, 2007 Have you checked your terms of business. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted July 12, 2007 Report Share Posted July 12, 2007 Aye - he has cheap furniture from me and then lets my props for me !!! Nothing in writing ... great until things go wrong ! Simon Link to comment Share on other sites More sharing options...
GPEL Posted July 12, 2007 Report Share Posted July 12, 2007 Sounds like a communications issue. The TDS wording is very specific in tenancy agreements. If that's the only sheme they use they would have set up the tenancy agreement wording specifying in the agreement how the deposit is handled. It would be hard for them to then pass the deposit to you if you're not in the same scheme as it leaves both them & you liable if the scheme used by you differs from the one in the agreement. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted July 12, 2007 Report Share Posted July 12, 2007 To complicate it a bit more - I negotiated the let of the garage to the rear of the prop after they had moved in - so i signed a new ast (one of mine -not the agents) so it is all directly with me now - how LA got money out of TDS i dont know - will have to ask T if they were informed or signed anything .. but i had the money within a few days of kicking off... Link to comment Share on other sites More sharing options...
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