Letting Agent liquidation – Questions about the tenants deposits?

Key questions:

Did the agent have client money protection insurance?

Did they belong to a Redress Scheme?

Reply to the comment left by Neil Patterson at 14/01/2019 – 09:22
I’m overseas at the minute so I can’t get to their office and communications are going unanswered. I checked with deposit Scotland and they haven’t lodged both my tennants deposits and quite a few other properties as well. By failing to register these deposits etc what criminal offences have been committed if any ?

In the event that deposits have not been correctly protected, or the client account has insufficient funds to repay them, the responsibility falls to the landlord to repay the tenant at the end of the tenancy unless there are legitimate reasons to withhold.

The importance of protecting a tenant’s deposit cannot be overstated. Failing to do so can result in severe fines and time in court, and can cost landlords the right to use an accelerated possession process when ending tenancies.

Reading between the lines, I suspect that not only were deposits not protected, but that the agent concerned probably didn’t belong to a redress scheme. A good agent would also have lodged both rental monies due to you and deposits (if not lodged with the scheme) due to the tenant in a separate client account.
Check with the liquidator as, if lodged in a client account with trustee status, it shouldn’t belong to the assets of the company.
I do however suspect you are on a hiding to nothing.
Your rights in relation to serving certain notices on the tenant are severely curtailed if proper procedures have not been met, but I would suggest that, if possible, you check what has been done in relation to :
right to rent information, gas and electric certificates, EPC assessments, rent increase notices – indeed a whole host of compliance requirements. If anything is missing, or you are unable to find out, I recommend that you put matters in place as soon as possible and obviously ensure the tenant pays no more to the agent or liquidator.
If you are staying with the agent proposed by the liquidator, check that the firm are in a redress scheme and that all client monies are protected. My own preference here is to use a firm regulated by the RICS (Royal Institution of Chartered Surveyors).

I am also going through the same process but my solicitor told me that in case of company let, you don’t need deposit scheme, however since company is dealing directly with tenants, it is company responsibility to keep tenants deposit in deposit scheme. It that right

Hi Craig

We have 13 properties we are taking over for CMC landlords. Rather than take the option to switch to the agent selected by the “liquidator” we can help you a bit more with your position.

We have more information about the situation regarding deposits that we may be able to help with. It might be safe but not with Safe Deposits.

Please feel free to contact me at Clan Gordon – 0131 555 4444.

Reply to the comment left by Jonathan Gordon at 15/01/2019 – 12:49
Jonathon, thanks for the offer but I have already appointed another agent and my outstanding rent has been paid.