Is my estate agent misleading me?

[abimsalabim]

I am a Landlord and I have a company tenancy which has now come to an end. I did a check-in inventory before the tenant moved in and I have done a check-out inventory now that they have moved out, and there are damages to my property by the tenant. The deposit is being held by the agent and is not in a Tenancy Deposit Scheme. The tenant has been informed of the damages to my property but, has refused to pay: they claim the property was in a poor state when they moved in but, they have not quoted any damages in the check-in inventory report.

The agent is refusing to handle the matter and has said that I would need to pursue the tenant via the courts. I do not believe this is the correct course of action and would like your thoughts on how to have the deposit be used to pay for the damages to my property.

[theartfullodger]

I take you mean by the company tenancy that the tenant is a company?

If so it cannot be (may not be, legally impossible to be ) an AST or AT. So deposit protection legislation dies not apply.

When you say tenant refuses to pay do you mean the company stated it would not, or that a human occupants said they wouldn't.

What inspection reports during tenancy do you have copies of please?

In your shoes I'd start court action against COMPANY not any human occupants.

Who supplied tenancy text? Please don't say company....

Do you have date/time stamped photos of check-in & checkout, and did company (not human occupants) receive copies please?

Were there any personal guarantees by directors?

[jpkeates]

The deposit belongs to the tenant, so it can't be given to you as compensation for your loss(es) unless they agree.
Which they don't seem to.

I'm not exactly sure what you mean by, "the agent is refusing to handle the matter".
Either they provide a service to you where they are meant to agree such things with the tenant (in which case they should sort it out) or they don't.

But they can't just give you the deposit, if that's what you mean.

Issue an invoice to the company for compensation for the loss in value to the property beyond fair wear and tear and sue them if they don't pay it.

[ash72]

Sack the agent, and do not entertain any company lets (unless your catering for serviced apartments) in the future, otherwise they are not AST's. Either write it off as an expensive mistake or take the company to court and plead your case.

[DPT57]

I assume you mean that the agent is holding the deposit but has it insured through one of the deposit schemes. The agent must contact the scheme to make a claim against the deposit to be paid to you. If they refuse, ask them for what purpose they have taken a deposit. Whatever happens, never let an agent handle the deposit again.

[abimsalabim]

I take you mean by the company tenancy that the tenant is a company?

Yes

If so it cannot be (may not be, legally impossible to be ) an AST or AT. So deposit protection legislation dies not apply.

Yes, I agree that deposit protection legislation does not apply and I happy to settle this dispute without trying to involve a Deposit Scheme

When you say tenant refuses to pay do you mean the company stated it would not, or that a human occupants said they wouldn't.

I understand where you are coming from. I do not have access to the company directly as all communication so far has gone through the agent, with them acting as a middle man. In regards to your question, the agent has stated that the tenant (company, not occupier) has stated that they would not pay

What inspection reports during tenancy do you have copies of please?

I have copies of the check-in inventory report and check-out inventory report. The agent has not dispute that the damages were caused by the tenant; they have simply stated that the tenant (company) does not want to pay for them and has advised me to seek the payment for the damages via court

In your shoes I'd start court action against COMPANY not any human occupants.

I agree however, is there any other avenue I can pursue?

Who supplied tenancy text? Please don't say company....

The agent drafted the tenancy text as far as I am aware.

Do you have date/time stamped photos of check-in & checkout, and did company (not human occupants) receive copies please?

The inventory reports were conducted by external third-party inventory service companies and have both, photos and dates

Were there any personal guarantees by directors?

I don't know. The tenant was sourced by the agent but, I didn't get any guarantees

[abimsalabim]

The deposit belongs to the tenant, so it can't be given to you as compensation for your loss(es) unless they agree.
Which they don't seem to.

I'm not exactly sure what you mean by, "the agent is refusing to handle the matter".
Either they provide a service to you where they are meant to agree such things with the tenant (in which case they should sort it out) or they don't.

But they can't just give you the deposit, if that's what you mean.

If the agent is refusing the mediate the dispute between the tenant and myself but, is instead asking me to go to court, what are my options in terms of penalising the agent? Apart from firing them, can I get compensation from them failing to provide their services?

[abimsalabim]

I assume you mean that the agent is holding the deposit but has it insured through one of the deposit schemes. The agent must contact the scheme to make a claim against the deposit to be paid to you. If they refuse, ask them for what purpose they have taken a deposit. Whatever happens, never let an agent handle the deposit again.

As I said in the original post, the deposit is NOT in a Tenancy Deposit Scheme but, instead is being held directly by the Agent.

[jpkeates]

If the agent is refusing the mediate the dispute between the tenant and myself but, is instead asking me to go to court, what are my options in terms of penalising the agent? Apart from firing them, can I get compensation from them failing to provide their services?

If you’ve paid them for a service they are refusing to provide, yes.

I’d start by invoicing the tenant company for the damage though.
You have two separate claims and it’s unlikely that the agent would bust a gut to do the job you want them to do.

[Lawcruncher]

In a case where the deposit protection rules do not apply how a deposit is dealt with depends on the terms on which it is held. What does the tenancy agreement or other relevant document say?

[abimsalabim]

In a case where the deposit protection rules do not apply how a deposit is dealt with depends on the terms on which it is held. What does the tenancy agreement or other relevant document say?

The tenant agreement states that the Landlord should hold onto the deposit until the dispute is resolved but, the agent is disputing this, claiming that they are the ones to hold onto the deposit as part of their Full Management Service

[jpkeates]

The tenant agreement states that the Landlord should hold onto the deposit until the dispute is resolved but, the agent is disputing this, claiming that they are the ones to hold onto the deposit as part of their Full Management Service

The problem is that the agent isn't bound by the tenancy agreement, and what they do with the deposit depends on their agreement with you.

As you can't do anything with the deposit anyway, because it's the company's money and they don't agree that you can have any of it, it's a bit academic (other than it's a better position for you to have the money and for them to have to recover it).
My guess is that, if you had it, they'd just sue you for it back anyway.

You're going to have to sue the company if they won't accept your claim.
Which sounds pretty weak, to be honest, if all you've got to go on is that there's no damage noted on the check in report.
Either the property was in a decent condition or it wasn't and you should be able to show that it was in a good condition.

[abimsalabim]

The problem is that the agent isn't bound by the tenancy agreement, and what they do with the deposit depends on their agreement with you.

As you can't do anything with the deposit anyway, because it's the company's money and they don't agree that you can have any of it, it's a bit academic (other than it's a better position for you to have the money and for them to have to recover it).
My guess is that, if you had it, they'd just sue you for it back anyway.

You're going to have to sue the company if they won't accept your claim.
Which sounds pretty weak, to be honest, if all you've got to go on is that there's no damage noted on the check in report.
Either the property was in a decent condition or it wasn't and you should be able to show that it was in a good condition.

Apart from the check-in and check-out inventory reports (which I have), what else can I use as evidence that the property was in good condition? Is there any other strong evidence?

[Lawcruncher]

If the tenancy agreement says that the deposit should be held by the landlord then it is the landlord who should be holding it irrespective (surely?) of what the management agreement says. Whoever in fact holds it holds on the terms set out in the tenancy agreement.

If the agent insists on keeping it you tell him that he must be holding it as a stakeholder. That imposes upon him a duty to apply the deposit as the tenancy agreement requires. If he is unsure how to apply it it is he who must apply to the court for directions. It is nonsense for him to say that you must apply to the court before he can release it.

Whilst the deposit may be the tenant's money it is quite incorrect to suggest that it cannot be applied to remedy any breach without the tenant's consent. That would make it useless as security.

[jpkeates]

Whilst the deposit may be the tenant's money it is quite incorrect to suggest that it cannot be applied to remedy any breach without the tenant's consent. That would make it useless as security.

But that is the position.
It is a convenient (and common practice), but it's the tenant's money until they agree to its use.

It's possible for the tenant to agree what it's to be used for in a tenancy agreement, but, even so, they'd have to agree separately to things that are not knowable at that point (like damage).