Insured to cover rent arrears/keep deposit??

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    Insured to cover rent arrears/keep deposit??

    Hi there, I need some advice.

    I am a landlady and use an agency (god knows why!). The tenant is now 2 months behind with rent. The agency have given her a section 21 which expired a few days ago. I am insured with paragon to cover rent arrears and its now in their hands to take the tenant to court if necessary.

    The agency only notified me 3 days ago that the tenant was in arrears and they had given a section 21. Should they have notified me sooner?

    The tenant also passed the referencing originally and had a job but the agency now informs me that rent is paid by the housing benefit. Should the agency also have informed me of this?

    As i am insured for rent arrears and their is a deposit of £1040 - am I entitled to also keep this even though I am insured? Hope this make sense? Why should the tenant be in arrears and get the deposit back?

    The agency also told me that when they did a drop by visit that the tenant had been smoking in house (no smoking in agreement) can I keep the deposit on these grounds?

    Thanks in advance for the advice.
    Nosnip

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