Who's responsible for Tenants Deposit

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    Who's responsible for Tenants Deposit

    I'm looking for advice on my current issue.

    Background..

    Tenant signs a AST with Letting Agent.
    Letting Agent fully manages he property and in Terms and Conditions states that they collect and handle the deposit - which is meant to out in one of the deposit protection schemes.
    Some months go buy and all is fine until I fail to get paid for a months rent, which I eventually receive, this then happens again.. So I start to question the letting agent..

    I then instruct the letting agent that i wish to leave and also ask where the tenants deposit is held.. I hear nothing, until I get a call to say that they (the letting agent) have gone into liquidation...

    I believe that my tenants deposit was not proctected correctly and has also been lost as well. But who is responsible for paying the deposit back to the tenant, or do they just join the long line of creditors like myself for unpaid rent.

    The way i see it, the tenant should make a claim against me and then i claim against the letting agent, but how does this actually work if the letting agent has gone into liquidation.

    Am I going to end up having to pay out the tenant his deposit ?

    What about if the tenant has no proof that he paid a deposit ?

    All Advice Welcome

    Thanks,
    Shaun.

    #2
    Originally posted by MrWells View Post

    Am I going to end up having to pay out the tenant his deposit ?

    What about if the tenant has no proof that he paid a deposit ?
    If the tenant has paid a deposit, and he can prove it, then you are responsible for its return.
    Allow tenants to protect their own deposits. I want free money when they do it wrong

    Comment


      #3
      as far as im aware you are responsible for the return of the deposit as the landlord but as long as you have proof the lettings agents managed the deposit then you should be able to start action against them for the amount.

      Comment


        #4
        Originally posted by MrWells View Post
        The way i see it, the tenant should make a claim against me and then i claim against the letting agent, but how does this actually work if the letting agent has gone into liquidation.
        You would have no-one to claim against if the agent company no longer exists.

        If the agent had been a member of a professional body such as ARLA, client monies would have been insured; but assuming the agent wasn't a member, and didn't protect the deposit, then you are liable for returning the deposit to the tenant. If the tenancy is current, then you are also liable for protecting the deposit.

        If the agent protected the deposit with one of the insurance-based schemes, TDS or MyDeposits, then the agent going into liquidation would cancel the protection, so you would remain liable. Even if the scheme paid out to the tenant (there are, I believe, limited circumstances in which this might happen) the scheme would then pursue you for the money.

        If the agent protected the deposit with the custodial-based scheme, DPS, then the deposit is held safely with them.


        What about if the tenant has no proof that he paid a deposit ?
        If you mean what if the tenant did not pay a deposit, then no refund is due.

        If you mean what if T *did* pay a deposit, but has no evidence of having done so (e.g. bank records, receipt, contract, etc) and you falsely allege that no deposit was paid, then I cannot comment further.

        Comment

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