Let only service, estate agent insists on holding deposit

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    Let only service, estate agent insists on holding deposit

    Hello,

    I have recently used a new letting agent who has found a new tenant for my property. I instructed on a let only basis so that I can self manage the property, including handling of rent which is paid to me directly to my account.

    I have requested that the letting agent pay the tenant's deposit to me so that I can place it in an approved scheme. However, the agent insists that they (the agent) hold on to the deposit. This raises my suspicion, what would happen in the case that I request a deduction to the deposit due to mishandling of the property? I will of course ask these questions to the letting agent this week.

    I would be interested to know if any other landlords, who have instructed on a let only basis, have let the letting agent manage the deposit.

    Kind regards,

    LeadingEdge

    #2
    It's your tenants deposit, for your protection. If the agent goes bust or doesn't comply with the legislation then you would be liable.

    Comment


      #3
      Originally posted by LeadingEdge View Post
      I would be interested to know if any other landlords, who have instructed on a let only basis, have let the letting agent manage the deposit.
      I have a tenant-find only agent. I allow the agent to protect the deposit, as they are an ARLA member agent and The Dispute Service member, so the deposit is safe whatever happens, even if the agent goes bust. It's just easier for me to let them do it and I can rely on them to do it (but they charge me £25 and I discretely check and make sure they have complied with the requirements - the rule is, never trust an agent).

      the agent insists that they (the agent) hold on to the deposit. This raises my suspicion, what would happen in the case that I request a deduction to the deposit due to mishandling of the property?
      The agent is not in charge of alleged claims against the deposit. The deposit is the tenant's money.

      Assuming the deposit is registered with a scheme and the T has been given the prescribed information (several pages), then what happens in a dispute is that you negotiate with the T, failing which you either raise a dispute with the deposit scheme and (if both parties agree) the adjudicator settles the dispute, or you bring a claim in the county court and the court settles the dispute and orders the deposit scheme to pay you or the tenant.

      Because the deposit is the tenant's money, the onus is on you, the LL, to provide evidence to support your claim for deductions; if you're claiming for damage, then you'll need an inventory/condition report conducted at both check-in and check-out, ideally. You could struggle otherwise.

      Comment


        #4
        N.B. If the deposit is not protected and/or the prescribed information given to the tenant within 30 days of receipt of the deposit, then the tenant may claim against you for non-compliance, and a court may order you to pay up to 3x the value of the deposit to the tenant.

        Comment


          #5
          Westminster, very useful insight. Thank you.

          Comment


            #6
            Originally posted by westminster View Post
            I allow the agent to protect the deposit, as they are an ARLA member agent and The Dispute Service member, so the deposit is safe whatever happens, even if the agent goes bust. It's just easier for me to let them do it and I can rely on them to do it (but they charge me £25 and I discretely check and make sure they have complied with the requirements - the rule is, never trust an agent).
            Do they insist upon this though? Does seem a bit odd to me that for a tenant-find-only service, there is still an involvement with the agent via the deposit, when otherwise all ties are severed once the tenant has been located?

            Comment


              #7
              No Eric an agent does not have to insist,

              I use an agent for 'tenant find only' in some areas and I always control and protect the deposit. Never been any argument about it. The agents are also ARLA and The Dispute Service members but my attitude is why involve more cooks in my own business.



              Freedom at the point of zero............

              Comment


                #8
                I had a situation a few years ago which I've previously discussed on the forum. I was in a private tenancy which was managed by a horrific agent. He was abusive, threatening, dictatorial and everything the stereotypical conman should be. We eventually terminated our tenancy (by proper methods) as his attitude was so bad. Shame really because, as it turns out, the house owner/landlady was lovely.
                The agent went bust and done a runner. Turns out he hadn't protected any deposits in the business and was swanning off to the emirates on regular holidays. Rumour has it, he was finally warranted on a fraud charge.
                Bottom line is that the deposit belongs to the tenant and should be held in protected status by the landlord. The agents can provide a service, but ultimately it's the LL's duty.
                I may be a housing professional but my views, thoughts, opinions, advice, criticisms or otherwise on this board are mine and are not representative of my company, colleagues, managers. I am here as an independent human being who simply wants to learn new stuff, share ideas and interact with like minded people.

                Comment


                  #9
                  The thing is that if the deposit was paid to the agent, then he is as liable as the landlord for the deposit's protection.
                  Hence some agents are not keen to simply hand over the money to the landlord, but insists on protecting it first (which has the added benefit for them to then be able to charge the landlord for that).

                  Comment


                    #10
                    Originally posted by Ericthelobster View Post
                    Do they insist upon this though? Does seem a bit odd to me that for a tenant-find-only service, there is still an involvement with the agent via the deposit, when otherwise all ties are severed once the tenant has been located?
                    No, my agent doesn't insist on protecting the deposit. It's an optional service. My ties with the agent aren't exactly 'severed' when a tenancy has been agreed; for a start, they pop up again when the term is about to expire, wanting to charge 'admin fees' for a renewal contract (thanks, but no thanks) and of course, charge their commission fees.

                    Comment

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