My agent has gone into administration, three months into a 12 month AST – where does this leave the deposit and contract?

My agent has gone into administration, three months into a 12 month AST – where does this leave the deposit and contract?

13:37 PM, 9th April 2015, About 9 years ago 7

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This agent manages a single house I acquired earlier this year in an area of the UK I don’t live near, so I used a local agent, on a finders fee only basis.

They did a great job in terms of tenant finding, and found a tenant who I am completely happy with, appearing reliable, and who I have met. The tenant moved in almost three months ago.

Since the contract was signed, things have clearly gone awry at the agents end. I have had no evidence of the deposit being in a secure scheme, and no statement of the first months rent with their fee removed.

Over the six weeks since my first raising this with the agent, I had a couple of responses like ‘the accounts woman is on holiday’, and then no answer. As of this week, their phone is now unobtainable, and I phoned the Property Ombudsman (with whom they are listed as a member) who confirmed that, as of yesterday, they suspended their membership, the reason given they had gone into administration.

They said they can do nothing for me, and didn’t have any further details or advice, as they only act for their active members!

Luckily the tenant is paying rent directly into my account, so this is not a compounding issue.

So, I am wondering what I should do. My absolute priority is to protect my tenant, and I am aware it is my obligation to place the deposit in a scheme, and then it becomes my debt to recover. The amount is around £1300. Presumably there is some kind of process to list creditors to a company that goes into administration? I have never had to do such a thing before so have no idea where you would start.

But also, I am wondering about the status of the current contract? This is between me and the tenant, but drawn up in the agents format, which describes fees payable for renewal, and at termination, payable to the agent by the tenant. Would some revived agency be able to demand these fees? Is it essential I tear this up and start a new contract, or just wait til renewal in 10 months time and then start a new contract then?

Any thoughts gratefully received!

Matthewclosed


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Comments

Neil Patterson

13:42 PM, 9th April 2015, About 9 years ago

Hi Matthew,

I am sorry to hear of your unfortunate situation.

Yes you need to contact the administrators asap, but did you take note of the companies Client Money Protection Policy and their Professional Indemnity insurance which they must have had to be members of the TPO?

If not please contact the TPO again and ask them to give you this information as they will have it on file as it is a requirement they check when you join.

I would also recommend you use our partner company Letting Supermarket from here on as well at only 4% fees and fully insured. please see >> http://www.property118.com/letting-supermarket-amend-pricing/68829/

I hope that helps.

Fed Up Landlord

14:27 PM, 9th April 2015, About 9 years ago

Check your tenancy agreement. It should state within it which scheme the agent has used. Then you can contact them to see if it is protected.

Colin Dartnell

1:17 AM, 10th April 2015, About 9 years ago

Can you be certain the deposit was ever put into a scheme??

Jose

11:34 AM, 10th April 2015, About 9 years ago

Thanks for the advice. The company had some info about their policy info on their website, the pages have now been removed. The ombudsman has advised they cannot divulge this information, and they only ever check at the membership application stage, not that it is still active insurance. I pointed out the point of Professional Indemnity Insurance is it has run off cover, but they countered that as this member has informed them the company is no longer operating, they have no power to intervene.
I have searched and there is no records that the company has been liquidated in companies house and so on, so I don't know where else to look.

So there are a number of "should have's" here, I know. One is do not trust the logo "Property Ombudsmen" to be of any use whatsoever, for either tenant or landlord ..!

Regarding the deposit, it is evident it has not been lodged in a scheme, the contract version I was given in advance differed from what was signed, which set out it was the landlord, not the agents responsibility to lodge the deposit. The simple fact is the cash never came to me.

Anyone any advice on the issues I raised around the contract?

Rob Crawford

12:10 PM, 10th April 2015, About 9 years ago

Hi Matthew, assuming a deposit was protected the tenants should have copies of the deposit scheme certificates, preliminary info etc. I would have a chat with them. If the terms of business that you signed differed from what you initially understood it could be that no deposit has been taken. The worse case scenario is that the agent took the deposit and did not forward it to you. This will be difficult to now prove to the receivers unless they can specifically check the accounts records. I don't think you can do much more than establish if a deposit was taken and to write a letter to the receivers with dates/amount etc. I would also contact the agents bank, the agents should have had a designated client account set up which is protected from the receivers, you may be able to access this via the bank directly. Unfortunately if the deposit is not found you will have to source this back to the tenants out of your own pocket.

Neil Patterson

12:18 PM, 10th April 2015, About 9 years ago

Hi Matthew,

You might want to look at this page about prosecuting rogues >> http://www.property118.com/private-prosecutions/69701/

Jose

13:06 PM, 10th April 2015, About 9 years ago

Reply to the comment left by "Rob Crawford" at "10/04/2015 - 12:10":

Yes, I have from the tenant that the deposit was paid... in cash ... on the day of receiving the keys. It appears this a clear case of a rogue. The 'redress' scheme (ombudsmen) explains that it is not a regulator. It is also clear that these people can set up immediately again as a new business, and the redress scheme does not look into whether they have any outstanding unresolved issues from previous businesses, or have been wound up ... scary...!
Looks like it is a case of trying to recover the money through legal action... hmmm

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