Let to Agent- returning deposit not received by L

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    Let to Agent- returning deposit not received by L

    This is a similar post to some others but we have a slight twist that someone might be able to give me a better idea of our legal position.

    As a landlord we instructed a letting agency to let our flat. The agent himself decided he would like to live there. That seemed like a great idea and we trusted him being the agent. However he was in partnership and the business closed with the other partner apparently leaving suddenly with money from the business.

    Our tenant remained and set up his own business and continued being a good tenant. He has now handed in his notice and has mentioned getting the deposit back. We didn't take the deposit, the agency that he was working for/representing did, 'apparently'. We have never had proof of a deposit being given to a deposit scheme so really as he was the agent at the time, he may not have even bothered registering one.

    I know there is a legal situation that as landlord we are liable, despite never having the money, but as a representative of the agency that supposedly took the deposit does that put any different legal spin on it?

    The legal ruling seems to be from 2004 yet deposit schemes were introduced much later - is there no protection for landlords when agencies go bust or run off with the money? If we let him take us to court would a magistrate see that we've never had the money so shouldn't be liable?

    Thanks for any thoughts.

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