Landlord (me) or agent to register deposit - pros & cons

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  • Landlord (me) or agent to register deposit - pros & cons

    Hello,

    I'm writing my ideal specification for employing an agent - I'm a very optimistic person!

    So this is hypothetical ... I'm trying to work out if it's better to get an agent to register a deposit or register it myself (even if I pay for a fully managed service).

    It seems to be quite standard, under a fully managed service, for the agent to register the tenant's deposit on the landlord's behalf. I just want a 'reality check' on whether this is the best approach or whether I should ask the agent to transfer the deposit to me or even register it on my behalf (if that's even possible).

    So I suppose whoever signs the tenancy agreement, also signs the prescribed information (or it's the same document). Does the deposit have to be registered by whoever signs this? Can an agent sign the document and then transfer the deposit to me? Can the agent transfer the deposit direct to the DPS in my name?

    If I register the deposit and I change the agent mid-tenancy then I won't have to ask the (old) agent to transfer the deposit to the (new) agent - although this doesn't seem to be a major issue.

    It seems that it's not unusual for agents to charge an additional fee for check-in and check-out so I may chose to pay a specialist organisation to do this. So if another organisation is advising if any deposit should be stopped for damages etc, they can just as easily advise me as the agent. As this is all done digitally I can contact the DPS from wherever I am so there'd be no delay.

    If the agent is doing the check-out, do I really want the same organisation advising on and executing the release of the deposit - what if I don't agree and they've already released the deposit?

    So they're my questions. I would be interested in any views. Many thanks.

    Helen

  • #2
    Simple answer to a long question ---

    no sensible landlord would ever employ an agent who insists on protecting the deposit themselves

    no sensible landlord let an agent hold or protect the deposit themselves

    Comment


    • #3
      Before T pays any deposit, LL opens a blank Custodial account for the property so LL/LA can pay deposit received deposit straight in and provide req PI
      If LA protects it, he may well use in-house Ins Scheme.
      LL should always require LA to provide him with all documentation sent/provided to T.
      Until all Schemes allow deposits to be freely transferred, with no loss of protection, like an ISA, always choose the simplest option. IMO

      Comment


      • #4
        Most people on here will tell you never to let an agent register the deposit on your behalf. And probably with good reason.

        There are plenty of lazy/ill-informed/crap agents out there who will easily cock it up for you and leave you with the repercussions.

        But there are also plenty who are perfectly capable of getting it right.

        I have over £700k of tenant's money sat in my deposit account and I've never got it wrong in the ten and half years that the legislation has been around.

        Provided the agent has experience, qualified and intelligent staff and the right procedures within their office, then there's no reason why they can't do it for you.

        That said, I have property I rent out through another agent and I don't let them register the deposits.

        Comment


        • #5
          Originally posted by HantsAgent View Post
          ....
          I have over £700k of tenant's money sat in my deposit account and I've never got it wrong in the ten and half years that the legislation has been around....
          A great record, good for you!

          But, with respect, since presumably no judge has given judgement on each & every one of those (presumably 100's..) of cases you don't actually KNOW you've "never got it wrong", merely that you've "never been found wanting"...

          Agreed, it's a mess and a muddle: Largely brought on my so many landlords for so long cheating tenants out of their money, so that Parliament imposed some penalties... "pour encourager les autres"

          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

          Comment


          • #6
            Well I suppose that is a fair statement (you're right, I've not had to evict anyone for over 15 years, so my methods remain somewhat untested).

            I'll rephrase; I'm confident I get it right every time because I personally check each file when the tenant moves in and because it's not rocket science.

            Originally posted by theartfullodger View Post
            Agreed, it's a mess and a muddle: Largely brought on my so many landlords for so long cheating tenants out of their money, so that Parliament imposed some penalties... "pour encourager les autres"
            Agreed, but they don't realise that by introducing these laws they aren't targeting those unscrupulous landlords.

            The kind of landlord who would keep a tenant's money without reason pre-2007 are likely to be the type of people who are now not registering deposits and just letting to people too stupid/desperate to know any better.

            This legislation is more or less self-policing, so it's reliant on tenants knowing their rights and I still come across far too many who have no idea that we must protect their deposits (and I deal with a lot of high-earning and reasonably intelligent people).

            Comment


            • #7
              The main LA we use for most of our properties has never put a foot wrong with deposit protection so far. An LA for a property we inherited did cock it up. When I found out the dep wasn't protected, I made them protect it and got a written statement that they would cover the cost of their negligence. Not sure that will hold up in court but it's very unlikely the T would sue anyway in this case so we hope we never have to go there.

              So, I've experienced both ends of the LA spectrum where that's concerned.

              so for those of you who don't rely on your letting agents, what advice would you give for those of us who have LAs but want to register the deposit ourselves. How would we go about it practically? And would you still recommend doing it ourselves if, like me, we're overseas?

              Comment


              • #8
                You have access to the Internet.

                Comment


                • #9
                  okay... let me spell that out then to see if there are any gaps in my knowledge
                  1. I'd have to make sure that the AST contains a clause that allows notices/PI/etc to be served by email.
                  2. They'd pay me the deposit via bank transfer.
                  3. I'd place the deposit with DPS.
                  4. I'd send them the PI via email along with an acknowledgement form.
                  5. They'd sign the form and scan and return to me so we have proof that they were given the PI.
                  Is it that simple, or am I missing something? Cheers.

                  Comment


                  • #10
                    Originally posted by tatemono View Post
                    okay... let me spell that out then to see if there are any gaps in my knowledge
                    1. I'd have to make sure that the AST contains a clause that allows notices/PI/etc to be served by email.
                    2. They'd pay me the deposit via bank transfer.
                    3. I'd place the deposit with DPS.
                    4. I'd send them the PI via email along with an acknowledgement form.
                    5. They'd sign the form and scan and return to me so we have proof that they were given the PI.
                    Is it that simple, or am I missing something? Cheers.
                    Also send a copy of the gas certificate (if applicable), EPC and How To Rent Guide if you want to be able to use a Section 21 in future.

                    What will you do if the tenant doesn't return the PI signed? Although you only have to "serve" the PI on the tenant - so posting it (providing you have proof) is acceptable - but I'm much happier with the lead tenant's signature on the document.

                    In your shoes, I would ask the agent to collect the deposit from the tenant with sufficient time to transfer it to you before the tenancy starts*. I'd then ask them to get the tenant's signature on the PI at the point of handing over the keys along with a signature to acknowledge receipt of the other documents.

                    *You can stipulate that the tenant pays you the deposit directly, but will they be happy to? I'm not sure I'd want to pay a large amount of money to the bank account of someone I've never met and I've been told is overseas.

                    Comment


                    • #11
                      My agent collects the deposit and transfers it to me to protect.
                      My tenancy agreement says that I hold the deposit (so that's clear).

                      And I post a letter with 2 copies of the PI, the deposit protection company's information booklet, how to rent booklet and the EPC (any gas certificate is in the property itself). With a stamped addressed envelope for the return of one copy of the PI. The letter allows me to explain what the bundle of documents are and to welcome the tenant.

                      I get about 2/3rds back signed.
                      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                      Comment


                      • #12
                        Making sure that the agent correctly protects the deposit is only one issue.

                        Another big issue is how to manage when the agent no longer represents you.

                        Comment


                        • #13
                          Or the agent ceases trading or is bought by someone else.
                          Or as happened to someone recently, dies, if they're a small business.
                          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                          Comment


                          • #14
                            Originally posted by HantsAgent View Post
                            Also send a copy of the gas certificate (if applicable), EPC and How To Rent Guide if you want to be able to use a Section 21 in future.
                            I meant all that when I said "PI"... unless I've misunderstood PI as something different?

                            Originally posted by HantsAgent View Post
                            What will you do if the tenant doesn't return the PI signed?

                            In your shoes, I would ask the agent to collect the deposit from the tenant with sufficient time to transfer it to you before the tenancy starts*. I'd then ask them to get the tenant's signature on the PI at the point of handing over the keys along with a signature to acknowledge receipt of the other documents.

                            *You can stipulate that the tenant pays you the deposit directly, but will they be happy to? I'm not sure I'd want to pay a large amount of money to the bank account of someone I've never met and I've been told is overseas.
                            These are all reasons why mariner's simple fact that I "have access to the Internet" doesn't help me. I'd still need to get the agent involved in any case. Currently, I make sure the agent and T do all they should to ensure deposit is protected. For overseas LLs who have to rely on agents, there's more chances of something going wrong if you attempt to do it yourself at a distance than entrusting it to a local reputable agent to act on your behalf.

                            Comment


                            • #15
                              Originally posted by tatemono View Post
                              I meant all that when I said "PI"... unless I've misunderstood PI as something different?
                              In discussions about deposit protection, mention of PI are normally specifically about deposit protection prescribed information [Housing Act 2004 / Housing (Tenancy Deposits) (Prescribed Information) Order 2007].

                              The other prescribed information / requirement you're referring to [Deregulation Act 2015 / Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015] are usually listed seperately in discussion.

                              Nothing wrong with thinking about it all together of course, since they all have to be served.
                              I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

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