Landlord wants to hold the deposit but the agent won’t release it?

by Readers Question

9:33 AM, 22nd June 2016
About 2 years ago

Landlord wants to hold the deposit but the agent won’t release it?

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Landlord wants to hold the deposit but the agent won’t release it?

I recently instructed a letting agent to find a tenant for a flat I own. I made it it clear that as an experienced landlord and a member of the TDS I would be holding the deposit and managing the property myself. hold

This was agreed, written into the contract and signed by all parties. The agent has now taken the deposit rather than instruct the tenant to pay it directly to me. They have admitted this was an error on their part. They are now refusing to release the deposit until I have registered it with the TDS.

I am loathe to do this because if the money ‘goes missing’ and is registered in my name then I am legally responsible. I know for a fact that they would never consider registering a deposit themselves without being in receipt of cleared funds so why are they expecting me to do so?

Should I stand my ground or register it with the TDS before I have actually received the money?

John



Comments

Neil Patterson

9:36 AM, 22nd June 2016
About 2 years ago

Hi John,

I think the only logical explanation I can see for this is that the agents are concerned they will give you the money when the tenant has entrusted it in their custody and hence it is their responsibility.

It would be worth asking them what their reservations are exactly and working from there.

Simon Hall

17:42 PM, 22nd June 2016
About 2 years ago

John, I agree with Neil as tenants have paid to the agents as such it would be their (agents) responsibility as long as they are solvent in relation to deposit money.

The best way to solve tho issue would be to to contact your tenants so they can ask your agents to transfer the monies in your account. You are responsible from the day the deposit was paid to the agent to register it with tenancy deposit protection scheme unless agents have already protected tenants deposit and it must be done within 30 days of collection.

To reiterate, as long as tenants ask the agents to transfer the money in your account then there is no way, they can withhold it. At the moment they are simply covering their back.

Steve From Leicester

10:26 AM, 23rd June 2016
About 2 years ago

From a pragmatic point of view you (the landlord) are ultimately responsible for the deposit anyway, so get it registered and the agent then has no reason to hold on any longer.

I share the view that the agent is simply covering his own back. Regrettably both landlords and agents sometimes fail to fufil their responsibilities, and equally regrettably a feeling of mutual distrust can develop.

zoe

7:21 AM, 24th June 2016
About 2 years ago

I had the exact same issue a year or so ago. I gave up fighting and just registered it with TDS, sent the letting agent the certificate and they send me the deposit.

John Frith

19:29 PM, 25th June 2016
About 2 years ago

The fact is that you are legally responsible for registering the deposit within 30 days of the agent receiving it, and although if it became a legal matter you might have a related claim against the agent, it's probably easier for you to be pragmatic and do what needs to be done.

I'm with DPS, and with them you can record a deposit (but not pay in the money), and then get a reference from them that the agent can use to transfer the deposit directly into the tenants account you've created. I'd be surprised if TDS don't have the same facility as it's much safer to transfer the money between schemes rather than have it paid out to the landlord and relying on the landlord to re-lodge. I don't see what objection your agent could have to that, as they would have an audit trail.

Have they registered the deposit in the scheme that they use and if so, which scheme?


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