Letting Agent has not registered tenant deposit and used money for owed landlord fees

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    Letting Agent has not registered tenant deposit and used money for owed landlord fees

    Hello my fellow gurus need some help please on this one, the landlords instructed an agent whom are TPO members to do a tenant find only with AST and deposit registration, this was October 2012 the tenant gave notice to leave in November 2016 who has now left but with property rectification issues and told the landlord to use the deposit money to pay for decorating etc, the agent involved states they have not registered the deposit with the DPS although the AST clearly states a deposit of £550 has been paid and to be registered with the DPS custodial Scheme, the agent claims that they assumed the landlord would register the deposit themselves although no deposit money was forwarded to the landlord only the first months rent of £495.00, the landlords do not deal with deposits and have no DPS account, it now appears the agent has used the deposit monies to pay for outstanding fees owed by the landlord (tenant find fee and another supposed outstanding cost relating to another property) no invoices have been received by the landlords that reflect these costs although the tenant find only fee of £250 is agreed, so what we appear to have is a tenant that paid a deposit who has now got no deposit and a landlord that is £400 + out of pocket regarding costs to reinstate the property, your thoughts and advice would be greatly appreciated.

    #2
    Return deposit (yes I know you never got it) to tenant TODAY and pray tenant doesn;t sue you (yes YOU!) for the up-to 3xdeposit that he is entitled to. Tenant has right to sue you for up to 6 years from when it should have been protected {30 days after payment} (ie presumably until Nov 2018). If tenant sues for his up-to-3x you may have case against tenant.

    Sue agent for negligence after sending LBA over not getting deposit protected in 1st place.

    Fire agent.
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      The deposit is the tenant's money but they have agreed to give it to the landlord to settle a claim they've agreed.
      There's nothing to be gained (in my view) by returning the deposit - unless the deposit is more than the agreed claim (in which case the difference should be returned.

      The agent cannot use the deposit to offset a debt owed by the landlord, as the money isn't the landlord's it's tenants.
      Unless the agent can show in some agreement that they have a right of offset (which doesn't exist as a general principle in the UK) the landlord can simply demand the agent turn over the amount that the tenant said could be used by the landlord.

      The agent should be advised to take some legal advice, because theft by conversion is actually a crime, not just something they can be sued for.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment


        #4
        Coope, what is your role in this scenario?

        Comment


          #5
          Originally posted by mariner View Post
          Coope, what is your role in this scenario?
          Hi I am the landlords agent now and I am trying to negotiate between them and the previous agent with not a lot of success !

          Comment


            #6
            It's the landlord's responsibility to register the deposit, so the tenant's claim is against the landlord.

            If the landlord then feels that he has a case against the prior agent (it sounds like he may well do) then that is an entirely separate matter.

            In the first instance I'd be worried about possibility of the tenant taking action against me (if I were landlord) and I'd do whatever I needed to to avoid this. Then I'd take action against the first agent.

            Comment


              #7
              It is the landlord's responsibility. However, the definition of landlord includes the agent acting on their behalf.

              If the landlord has evidence to demonstrate that the agreement betweent the LL & LA clearly includes responsibility for the LA to receive and then protect the deposit, then in this situation I'd be tempted to join the agent as a defendant in any case that the ex-tenant may bring against the LL for protection penalty.

              That of course doesn't help with the return of any outstanding deposit if such action are needed. As the LL, deal with the situation as if you did receive the deposit from the former agent, and then take separate action against the former agent to recover the money.
              I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

              I do not answer questions through private messages which should be posted publicly on the forum.

              Comment


                #8
                It's actually the responsibility of whoever receives the money for the deposit.

                Housing Act 2004, In this chapter
                references to a landlord or landlords in relation to any shorthold tenancy or tenancies include references to a person or persons acting on his or their behalf in relation to the tenancy or tenancies
                Not exactly sure what a chapter is meant to refer to, mind.
                When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                Comment


                  #9
                  "this Chapter" == Chapter 4 of Part 6 of the Housing Act 2004 == s.212 to s215C of the Act, i.e. all the bits about Tenancy Deposit Schemes.
                  I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                  I do not answer questions through private messages which should be posted publicly on the forum.

                  Comment


                    #10
                    You know what, I've never even thought to look at the contents to see that the act is broken into chapters.

                    Learn a new thing every day.
                    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                    Comment

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