Letting Agents Close Owing Landlords and Tenants Cash

At first, this confused me. Surely if they have the money they can return it, but then I realised TDS is the insurance based scheme.

On that note - some good news!

My company went belly up (http://ceo.smartergroup.biz/rip-smarter-housing-2005-2010/) and mydeposits.co.uk paid out on deposits that were protected before the company went bump: as they should do. What's the point of paying the insurance premium if they're not going to pay out?

The company is now in the hands of the Insolvency Service who keep getting letters from mydeposits.co.uk chasing those deposits.

Ultimately, someone pays, but it doesn't need to be the Landlord/Tenant.

I appreciate your honesty and acceptance as to what the circumstances were concerning your issues.
I would suggest that you are an exception to the reasons as to why LA ostensibly have run off with the monies.
Of course it is possible the same situation has occurred with these other LA; but unlikely..........!
Clearly domestic trauma compromised your normally astute business dealings
I do not however believe that such an excuse may be used by these criminal LA.
The net effect however is still the same and that is unless the landlord is paid rent directly and has the deposit monies in his own bank account there is always the risk that a LA can do a runner leaving the poor old LL high and dry.
I intend for that never to happen to me.
Which is why I will only allow a LA to source a tenant.
I will do ALL the credit checking receipt of monies etc.
If it doesn't work out I don't pay anything to the LA.
If I use that tenant then I do pay the LA
I also don't allow the LA to market my property online.
I do that.
Therefore any tenant source via the LA comes from footfall.
If I achieve a tenant then there is nothing to pay the LA.
If they source a successful tenant then of course they get paid.
This way I can maximise the full benefit of the internet; but accepting that some tenant enquiries will come from shop based LA.
I would say to date 30 % of my tenants come from LA  and the remainder I have sourced at a considerable saving to myself.
Simples.
Any LL that uses a LA is taking an enormous risk if they allow them to have anything to do with collection of monies.
Clearly not all LL are in a position to do things for themselves and they will of course have to rely on the services of a LA.
They must however be aware of the risks and carry out full due diligence on their intended LA before signing contracts with them.
.

My husband and I have now had our money returned by Carl Baxter.
Claire Wightman.

That's great news Claire. 

Hi Paul,

I understand your views on this. I agree entirely - I actually started my (now deceased) letting agency as I was messed around by three separate companies in Leamington Spa whilst renting student accommodation.

All three companies stole my deposit (pre-current rules). One company paid back our next door neighbours TWICE their deposit even though they were short on rent. In all, it looked like a shambles and I thought I could do better.

For a while, I did. However "the proverbial" happens and I am where I am now.

Carl Baxter actually contacted me over the weekend after seeing my blog post (http://ceo.smartergroup.biz/baxter-todd-letting-agency-missing-in-action/) and I believe he messed up as opposed to doing anything illegal.

From what I tell he is returning money out of his own pocket which is something he doesn't technically need to do, given the protection of a limited company.

Kind regards,

Adam

Carl Baxter contacted me over the weekend after seeing my blog post on his situation (http://ceo.smartergroup.biz/baxter-todd-letting-agency-missing-in-action/).

From the very brief exchange I believe he messed up and didn't do anything illegal with the money. The closure of one company and opening up of another is dodgy but this was done with good intentions. In hindsight he should have folded when his partner fled the country.

I also note he is returning money from his own pocket (and one affected Landlord has confirmed this in the comments).

Hopefully in time everyone will get their money back.

(I should add this is personal opinion. I could be proven wrong but I hope that is not the case).

Adam You may well have made mistakes that have cost others money but you have shown that you have integrity and are prepared to own your mistakes - good for you.

I have worked with several landlords who have been left in a mess by Agents who have gone OOB. Some of these Agents clearly intentionally broke the law but most just got it wrong.

Landlord need to be extremely diligent when they choose an Agent because everything that the Agent does or does not do will come back to the Landlord.  Landlords cannot devolve their legal responsiblities to an Agent and become passive investors and those who try to do this are the ones who are getting hurt.

1. Keep originals of ALL documents and let the Agent keep a copy on file
2. If you haven't got your Deposit Protection Certificate and Receipt of payment don't rest until you get it.  Each deposit protection scheme will tell you if they are protecting a deposit - there are only 3 and its worth checking
3. If the deposit is not being lodged with a custodial scheme hold it on your own tenant account
4. If you are relying on your Agent being a member of a professional body find our the renewal date for their membership and make certain that they continue to be members while they are working on your behalf.  As the organisation EXACTLY what their powers are, you may be surprised that they do not check more than the accounts of their member Agents.
5. Give a written instruction that you want copies of all correspondence between the Agent and the Tenant and that no legal notice is to be served before you see it.

When an Agent goes OOB it is not only the deposit that causes landlords problems and financial loss many landlords have no idea who their tenants are nor have they details of the AST.  I am meeting a landlord next week and he has spent months trying to sort out problems caused by letting an Agent "get on with what I paid him for".  His loss of rent is around £50K so far and there is no end in sight despite instructing two Solicitors

I wasn't aware there are now 3 companies who can protect deposits (in my day it was TDS & DPS) & will update my blog accordingly.

Thank you for your comments & good luck with next week's meeting!

In follow up to my last response - which I can't amend as it hasn't been approved yet - I was aware of the 3 companies. It's been a while since I was involved in letting and forgot that The Dispute Service also run the Tenancy Deposit Scheme.

I thought I'd correct myself before someone points out the error of my ways 🙂

Mydeposits, an insurance-backed scheme.
The Tenancy Deposit Scheme (TDS), an insurance-backed scheme.
The Deposit Protection Service (The DPS), the only custodial scheme.
These are the ONLY companies who have Government contracts to protect tenants deposits - there have been bogus sites where landlords have also lost money