letting agent has gone bankrupt. what's next?

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    letting agent has gone bankrupt. what's next?

    hello

    I am renting my property and had an agency managing the tenancy for the last 2 years. Last week the agency went bankrupt. I would like to create a tenancy contract with the tenant directly. What is the best way to do this? Also, the agency held tenant's deposit in the TDS scheme. How do I get it transferred to my name? Any guidance and advice is very much appreciated!

    Thank you

    #2
    1) The tenancy agreement should already be in your name, please check.

    2) If the deposit is with TDS or My Deposits then the cash is actually with the defunct agent - if you can't get it from them then you may have to provide a replacement deposit yourself.

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      #3
      Originally posted by Snorkerz View Post
      2) If the deposit is with TDS or My Deposits then the cash is actually with the defunct agent - if you can't get it from them then you may have to provide a replacement deposit yourself.
      I am intrigued how this should work out on agent bankruptcy as the agent held the money as stakeholder and not on his own account (i.e. the money belongs to the T). I presume the agent will/should be prosecuted for theft? Have you informed TDS?

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        #4
        Originally posted by dominic View Post
        I presume the agent will/should be prosecuted for theft?
        If you owe money, go bankrupt, and can't pay it back this does not make it theft.

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          #5
          I don't use the TDS so I don't know much about them. I do know it is an insurance backed scheme. Phone the TDS and explain the situation. It may be that in these particular circumstances the insurance will reimburse the amount of the deposit to you.

          The existing tenancy agreement is still valid.

          Comment


            #6
            Originally posted by jjlandlord View Post
            If you owe money, go bankrupt, and can't pay it back this does not make it theft.
            That presupposes the money belonged to you in the first place, this didn't and should have been in a client account, at least the cash element, the interest, if any, would be yours I suppose.
            I offer no guarantee that anything I say is correct. wysiwyg

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              #7
              Going bankrupt and taking the deposit down with you is not theft. One would need to carefully look at exactly what happened to determine otherwise.

              A client account is not a statutory requirement as far as I now, and probably doesn't change anything.

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                #8
                Sorry jj, you better talk to the other ear, this one seems to remember that a deposit is irrevocably the property of the tenant that paid it until the landlord may have a call on it and even then tenant and landlord have to agree or go to arbitration or court if they can't agree.

                So..........tenant's money..........agent takes it.............naughty and illegal.........in my opinion.
                I offer no guarantee that anything I say is correct. wysiwyg

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                  #9
                  Well I don't recall that if landlord refuses to refund a deposit, or has gone bankrupt and can't refund at all, the next step is to call the police to have him arrested...

                  Comment


                    #10
                    Originally posted by jjlandlord View Post
                    If you owe money, go bankrupt, and can't pay it back this does not make it theft.
                    As others have said, it is not the agent's money. As the following thread goes to show, the agent holds it as stakeholder only, ands the money belongs to the tenant.

                    http://www.landlordzone.co.uk/forums...-deposit/page2

                    Theft (if I recall) is legally defined as dishonestly appropriating property belong to another with the intention of permanently depriving them of that property.

                    So my remarks were meant as a query - is this theft? The rules of the scheme make it clear, as I understand it, that the money is never the agent's but belongs to the tenant until certain criteria are met.

                    Comment


                      #11
                      Originally posted by dominic View Post
                      The rules of the scheme make it clear, as I understand it, that the money is never the agent's but belongs to the tenant until certain criteria are met.
                      We all know that the deposit belongs to the tenant, but that's not key. It's not the first time the issue pops up, and clearly (as suggested above) it's quite exceptional that deposit issues become criminal.

                      You remembered very well the definition of 'theft' in the Theft Act
                      As you can see even if you (dishonestly) appropriate the deposit you must do so with the intention to keep it, which is difficult to prove, and usually not what happens when a landlord or agent goes bust and can't pay it back.

                      There was a case reported once on this forum of a landlord (in Leeds, iirc) who was indeed charged with theft.
                      He was a large-ish landlord and was running the same scam with all his tenants, so that the pattern was used to in fact prove that he had no intention to ever give the deposit back when he was receiving one.

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                        #12
                        Thank you ALL for your replies. Really useful info!

                        Comment


                          #13
                          Originally posted by jjlandlord View Post
                          We all know that the deposit belongs to the tenant, but that's not key. It's not the first time the issue pops up, and clearly (as suggested above) it's quite exceptional that deposit issues become criminal.


                          As you can see even if you (dishonestly) appropriate the deposit you must do so with the intention to keep it, which is difficult to prove, and usually not what happens when a landlord or agent goes bust and can't pay it back.
                          But the money was never the property of the agent to start with! It belonged to the tenant.

                          If I was asked to hold someone's wallet while they tried on a suit then appropriated the cash in that wallet then I would be charged with theft, never mind saying that I wasn't going to keep it, the act would be enough for the charge, no difference with the scenario of an agent holding a deposit, he should never have touched the money in the first place. Using money held in trust is theft.........end of.
                          I offer no guarantee that anything I say is correct. wysiwyg

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