Deposit stolen by agent and I do not want to renew AST

Deposit stolen by agent and I do not want to renew AST

14:33 PM, 23rd September 2015, About 7 years ago 9

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I have a serious potential headache and would welcome your advice. In July 2009 I rented a house to a married couple and their burglar

The agents took the deposit (788 pounds) and placed it with My Deposits.Co . The agents subsequently closed down and stole the money. This happened in 2011. I contacted the police and trading standards at the time, but with no success.

The tenants have been in the property ever since paying the due rent. In February 2015 they signed another tenancy agreement which is due to expire on the 9th February 2016.

At the beginning of September I was informed by the husband that he had left the house after a split with his wife and that she was now responsible for the payment of the full rent (560 pounds). He cannot be contacted other than by phone. However I know where he works.

I wish to end the tenancy and for the remaining tenant (the wife and her two children) to move out when the current tenancy expires. I have however agreed to her paying me via Housing Benefit in the meanwhile until February 2016 . This however leaves me 77 pounds short PCM. Better than nothing I suppose.

I wish to serve a Section 21 Notice but the problem is what about the missing Deposit money? Should I pay this into the DPS from my own pocket or hand it over to the tenant with proof of transfer . I have been told a Section 21 cannot be served unless the Deposit is protected or handed over to the tenant .

The later option is not something I would prefer for obvious reasons to do with damage to the property etc. Although the tenant has indicated she is willing to move she may become awkward if she cannot find suitable housing on HB and will end up going to the Council. I am of the opinion that if I put the Deposit into the DPS she would have suffered to tangible detriment should this go to court for repossession proceedings.

Your advice would be much appreciated.



Neil Patterson View Profile

14:37 PM, 23rd September 2015, About 7 years ago

Dear Sukhy,

I would recommend you have a chat with our friends at Cotswold Barristers.

Please see our private prosecutions page under the legal tab >>

Chris B

11:33 AM, 24th September 2015, About 7 years ago

Hi Sukhy

Very sorry to hear about your problem, and I agree with Neil that it would be worth taking legal advice.

I am intrigued though, if the agent deposited the money with a deposit scheme how did he run off with it? Also, was the agent part of any redress scheme?

I hope everything works out soon

regards, Chris

Dr Monty Drawbridge

11:44 AM, 24th September 2015, About 7 years ago

Reply to the comment left by "Chris B" at "24/09/2015 - 11:33":

My Deposits is a non-custodial insurance based scheme so the agent or landlord can hold the money themselves.

S.E. Landlord

12:06 PM, 24th September 2015, About 7 years ago

Reply to the comment left by "Dr Monty Drawbridge " at "24/09/2015 - 11:44":

If non custodial insurance based it should be possible to claim on the insurance, but there may be a time limit for advising the scheme.

If letting agent closed down it is likely that the deposit scheme company would have been advised of this and I expect then to write to all protected deposit tenants advising of the position and asking for details of tenancy and proof of deposit paid etc.

Teg's Dad

12:34 PM, 24th September 2015, About 7 years ago

I am still surprised that deposits are not all custodial. It is the only way to prevent dodgy agents and landlords stealing deposit money.

There would, however, have to be an easier and quicker way of returning deposits where the tenant ignores correspondence. Perhaps a time limit of say, six weeks, after which if the tenant does not provide evidence etc, the landlord/agents' claim is accepted and paid out.

Dr Monty Drawbridge

15:26 PM, 24th September 2015, About 7 years ago

Reply to the comment left by "S.E. Landlord" at "24/09/2015 - 12:06":

SE Landlord.

You are certainly right that that the insurance would pay out to the tenant if the landlord defaulted. I'm not certain but I doubt they would pay out to the landlord as the party liable to return it should really be holding it.

Teg's Dad,

The insurance policy pays out to the tenant if the deposit is not returned so the tenant cannot lose out. The landlord remains liable but liability shifts to the deposit scheme - so they can't simply "get away" with it. I can't remember what the default rate is but it is tiny.

S.E. Landlord

16:17 PM, 24th September 2015, About 7 years ago

Reply to the comment left by "Dr Monty Drawbridge " at "24/09/2015 - 15:26":

The scheme would pay out to the tenant. The scheme would not pay out anything to the landlord, even if there were any damages.

Chris B

5:17 AM, 25th September 2015, About 7 years ago

Hi Monty,

I thought that the deposit within insurance based schemes were supposed to be kept in a separate account from the agents business account. By using it, has the agent committed a crime? While it is unlikely that the money would be returned, the thought of the agent sitting in a prison cell being scared to have a shower would cheer me up enormously!

Nitzan Marinov

14:46 PM, 26th September 2015, About 7 years ago

I had a similar situation. The deposit was protected with insurance by the agent, who subsequently, put his hand into that pocket and helped himself to £500,000 of tenant deposit money.

My situation was that the tenants wanted to leave shortly after so we contacted the DPS (I think it was at the time) and I had to sign a form that said that I had no claim to the deposit. The entire deposit was then paid out to the tenant and there was no issue at all.

I don't know what would have happened if I had a claim to some of the deposit. It would seem strange to me that I wouldn't have been able to claim any of it with appropriate evidence of damage or non-payment of rent.

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