Letting agent disappeared off face of planet with tenant's deposit

[ingssss]

So after having constant problems with late rent, I found out it was not an issue with my tenant but my letting agent, not paying on time (months behind). Long story short, the agent was having financial problems and has gone out of business. So I've switched to managing the property myself, and luckily I am up-to-date on rent, and tenant is paying me directly.

I have set up an account with a deposit protection scheme for the tenant's deposit, and have been calling/messaging/emailing the letting agent 3 times a week for the last 5 weeks to transfer the tenant's deposit to the scheme. However he is ignoring any attempt for me to reach him.

Can I take this matter to court? It's a strange one because the deposit is really the tenant's money, not mine, so I'm not sure I can pursue it. However I want to protect my tenant, and also be sure that the behaviour of the agent doesn't go unchecked.

Any advice would be very much appreciated!!
Thanks

[jpkeates]

If the agent has gone out of business I think you're stuck.

Pay the tenant's deposit into the scheme and accept the loss.

[royw]

I don't think they have to hand it over because you ask for it. I bought a tenanted property and high street LA wouldn't transfer it to me but they did return it to the tenant at the end of the tenancy. Possibly they will if the tenant tells them to, mine were leaving anyway so we didn't go down this route. It isn't a nice situation as it's you that has to return it even if you've never had it. IIWY I'd end this tenancy and start a new one ASAP, the longer it goes on the less likely you are to get it. Is it in a scheme?

[DPT57]

This is one reason why you should never let agents deal with the deposit.

[theartfullodger]

Write to tenant request payment to yourself

[ingssss]

Thanks - I already copied the tenant in the correspondence to the LA telling him to transfer the funds to the new deposit protection scheme. I can't ask the tenant to pay me a new deposit - they have already paid that to the LA many months ago.
I must admit I was surprised to learn that LAs are not obliged to transfer funds to the deposit protection scheme - I though the reason for these organisations was precisely to avoid problems like these

[DPT57]

You wouldn't be asking the tenant to pay anything. You would be protecting a sum of your own money equivalent to the deposit and serving all the required documentation to the tenant and hoping that they dont ask any further questions.

[ingssss]

Sure I'll definitely cover the deposit for my tenant - it's not their fault the LA was bad. So I'll transfer my own money to the deposit scheme for them, and write it down as a loss.

However, what about the deposit the LA holds? Who does it belong to? Landlord, Letting Agent or Tenant? I think if it belongs to LA or Tenant, then I am not able to chase LA for it in small claims court?

[AlexR]

I believe all Lettings Agents need to register with a redress scheme. Are you not able to find out which one and lodge a complaint? You will find some details on Gov.uk site about the redress scheme.

[ingssss]

Thank you AlexR - I didn't know such a thing existed. The LA doesn't mention on their website which scheme the belong to (if they indeed belong to any), but I'll contact the two schemes to see if they can help

[DPT57]

Did the agent have a Client Money Protection account?

[jpkeates]

If the agent has gone out of business, chasing them is pointless.

If you were to take legal action to "recover" the deposit, it would be on the basis of compensation for your loss arising from the agent's failure to perform the contract that they had agreed to.
Your loss being the new deposit being protected.

[ingssss]

Did the agent have a Client Money Protection account?

Not sure what that is - they registered the deposit with MyDeposits, but I have learned that LA does not have to actually put the tenant's money into these custodial schemes. They only need to register it.

[ingssss]

jpkeates,

Technically the company has not been requested to be shut down/struck off yet. But the office is closed and they have no more lettings advertised. The LA has actually opened up a new company, so I guess he's run the old one into the ground owing people money, then wants to start afresh with a new company not owning anybody anything

[ingssss]

I just googled the Client Money Protection scheme, and it is similar to what AlexR alluded to above, and that it is a mandatory requirement for Letting Agents to advertise it on their website (which LA in question does not...!). I see there are also heavy fines for not doing this, so perhaps there is extra leverage here, if he ever responds to my voicemails, letters, emails, texts ....