Letting agent unwilling to release deposit to me?

Letting agent unwilling to release deposit to me?

8:45 AM, 7th June 2018, About 5 years ago 23

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I have two properties in Wales. One I manage myself and the other, up until now has been managed by a letting agent.

I decided some time ago to take over the management myself and duly gave 3 months notice to the letting company that I wished to do so. At that time I also informed them that I would like to hold the deposit and put it into my own scheme.

This seemed fine at the time and they agreed to this, getting my tenant’s agreement that the deposit could be held in my scheme.

I received the last month’s rent from the letting agent yesterday, but no deposit monies. I have telephoned them to ask where it is and they say they will not release the money to me until I have registered the deposit with my own scheme and given them proof that I have done this.

Can anybody advise me whether this is right?

Firstly I have not received the money so how can I register it with the scheme?

Secondly the deposit amount was £675.00 – if I was using a custodial scheme are they expecting me to pay the money over out of my own funds?


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John Frith

14:20 PM, 7th June 2018, About 5 years ago

I'm no expert.
You don't say how the deposit is currently held, but presumably it is held via an approved scheme.
You should be able to arrange for the destination scheme provider to contact the source scheme provider for them to transfer the deposit between schemes. I believe this is the recognised, accepted and simplest method. The agent will have to cooperate to give the relevant source scheme reference number to you to give to the destination scheme.

If it goes from a non-custodial scheme to a custodial scheme, the agent should pay it directly into the destination scheme.

Chris @ Possession Friend

14:25 PM, 7th June 2018, About 5 years ago

That's right John,
If the landlord has a Custodial deposit account with say, DPS - which is where the Agent has protected, it can with the Agents co-operation be quite properly transferred.
I think what we're picking up here is some reluctance by the agent. The reason is not clear, is it sour grapes because L'lord has ended the contract, or is there some fault on the Agents part in the deposit that they don't want to come to light. ?


19:18 PM, 7th June 2018, About 5 years ago

Lessons to be learnt here. Why entrust an agent to lodge a deposit for you, when you can simply do it yourself. it would have saved you all this nonsense.

Kate Mellor

21:31 PM, 7th June 2018, About 5 years ago

Whilst I’ve never used an agent, and so haven’t any direct experience in this area, I would have thought that the date the deposit was received (for the form) would be the date the tenant paid it to the agent rather than the date the agent transferred it to you. The agent acts in place of the landlord, so it is one and the same as it being paid to the landlord. As you point out, the landlord is responsible for any breaches of the deposit regulations whether made by himself or the agent. So it seems to me that if you register the deposit as being received on the date the tenant paid it to the agent that would be correct, no? Assuming you have a paper trail showing that it was protected by the agents scheme in the correct time frame etc you should be fine. You won’t be at any loss by doing so as the agent is a national chain & is unlikely to try and pretend they’ve paid if they haven’t. 🤔


3:47 AM, 8th June 2018, About 5 years ago

They have a legal responsibility to arrange the transfer of the deposit that they formely held under contract on your behalf - find out what company holds the deposit and seek advice from them. In terms of the they will not release the money to you until you have registered the deposit with your own scheme and given them proof that you have done this - is this reflected in the Agents business terms and conditions? If not get a solicitor to write a letter that threatens action through the courts - and don't forget to contact the Property Omnbudsman and ARLA etc, assuming they are memebers.


11:28 AM, 8th June 2018, About 5 years ago

There has been a recent court case where a landlord wanted possession and it got thrown out in court because he had protected the tenants deposit before he had received it. So anyone who asks you to protect the tenant deposit before you have received it is wrong.
I was in the same position where a letting agent would not release it as they did not trust me to protect the deposit. But it is not up to anyone to play policeman as the problem will always come back to the landlord and you would be stupid not to protect the deposit (once you have received it).

Chris @ Possession Friend

14:48 PM, 8th June 2018, About 5 years ago

Reply to the comment left by karin melbye at 08/06/2018 - 11:28
I can see the logic in that Karin, but do you have the case reference details please.

Michael Barnes

23:32 PM, 8th June 2018, About 5 years ago

It is my understanding that YOUR agent should work on YOUR instructions.

Michael Barnes

23:35 PM, 8th June 2018, About 5 years ago

Reply to the comment left by Chris Daniel at 08/06/2018 - 14:48
I think this is the case Karin is referring to:

Michael Barnes

15:35 PM, 10th June 2018, About 5 years ago

Thinking about it, the agent may be correct (or at least looking out for your best interests).

Technically you have received the deposit because it was paid to your agent.
If the agent gives you the money before you have protected it, then it may be that the deposit is unprotected for a short period (putting you in a difficult position), or it may be that you never do protect it (also putting you in a difficult position). Also, if the agent gives you the money without evidence that you have correctly protected it, then there may be some comeback on him for negligence.

You will not fall foul of the recent judgement regarding protection before receipt because:
a) you ARE in receipt of the deposit, and
b) that judgement was about serving prescribed information before the deposit was received (and is not binding).

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