TDS and deposits held by agent

by Readers Question

16:20 PM, 17th February 2015
About 4 years ago

TDS and deposits held by agent

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TDS and deposits held by agent

This one has gradually crept up on me……. TDS and deposits held by agent

As I now have several properties the value of deposits held by my letting agent is starting to add up to quite a big number.

He does my properties on a finding fee basis although is about to do one on a monthly fee, anyway this aside he uses the TDS model and holds the deposit.

As I understand it in the unlikely event he was to go “tango uniform” I would be liable for the deposits.

On this basis it would be safer for me to hold the deposits, is it reasonable for me to ask for them?

Many thanks.

James Pearce

 



Comments

Mark Alexander

16:26 PM, 17th February 2015
About 4 years ago

Hi James

I think you are right to be cautious, as you say, you are ultimately responsible.

Your agent may well everything in hand in terms of protecting the deposits, PI insurance and Client Money Protection. However, these things can easily lapse if the business ever runs into financial difficulty. Can you ever be too careful?

Your agent might not like the idea of handing the deposit protection over to you but that doesn't give him the right to refuse, unless of course he's prepared to risk losing you as a client.

The risk of managing the deposits yourself is if you mess up on re-serving Prescribed Information or re-protecting. If you slip up then you have nobody else to blame. You will also need to work very closely with your agent to ensure that you know exactly what he agrees with tenants as well. For example, if he grants a new tenancy without you knowing then that could cause problems.

There is no right or wrong answer because their are pros and cons in whatever you decide. Just think it through very carefully.
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Zaher Waljee

10:26 AM, 18th February 2015
About 4 years ago

Hi I have held deposits of several thousand pounds and protected through mydeposits.co.uk. I have kept these monies in separate ISA Account earning interest and return deposits from own monies when tenants leave and also refund proportion of rent if paid for the month and tenants leave earlier. Hope this is helpful.
Zaher

r01

10:43 AM, 18th February 2015
About 4 years ago

There are three local agents that have gone belly-up in my area taking landlord deposits and rents with them so I only ever allow my deposits to be held by the DPS for this reason.

R

Mark Alexander

11:47 AM, 18th February 2015
About 4 years ago

Reply to the comment left by "r01 " at "18/02/2015 - 10:43":

If you know of any of the victims of these agents please point them to http://privateprosecutions.org/

The agent has committed the criminal offence of "Fraud by abuse of position". The Police and CPS prosecute less than 1% of white collar crimes of this nature as you will no doubt be aware. That's why PPS was established. Private prosecutions can be cost neutral, funded by the state, do not require police or CPS involvement and can still lead to criminal convictions and associated punishment, and confiscation of the business owners personal assets (even if the crime was committed by the directors of a limited company) to fund financial restitution for the victims.

I would also run the stories on Property118 🙂
.

Mark Alexander

11:56 AM, 18th February 2015
About 4 years ago

Reply to the comment left by "r01 " at "18/02/2015 - 10:43":

PS - crime has no statute of limitations either so it doesn't matter how old the cases are.
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Appalled Landlord

12:03 PM, 18th February 2015
About 4 years ago

Hi Mark

My agent sends me a copy of the protection certificate from the TDS, and I then go onto the TDS website and check that it is genuine. Is this not sufficient?

Mark Alexander

12:06 PM, 18th February 2015
About 4 years ago

Reply to the comment left by "Appalled Landlord" at "18/02/2015 - 12:03":

Not really, your agent is still holding the money. If he goes bust and hasn't got Client Money Protection then you are pretty much screwed!
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Appalled Landlord

12:40 PM, 18th February 2015
About 4 years ago

Reply to the comment left by "Mark Alexander" at "18/02/2015 - 12:06":

Then what is the point of the TDS?

Mark Alexander

13:17 PM, 18th February 2015
About 4 years ago

Reply to the comment left by "Appalled Landlord" at "18/02/2015 - 12:40":

Why are you asking me?

Ask them.

My understanding is that they are offering an arbitration scheme which complies with the law. The insurance element isn't worth the paper it is written on from a landlords perspective in my opinion. Same for MyDeposits. We have to watch our own backs. The legislation was drafted to protect tenants, not landlords!
.

mark mark

13:37 PM, 18th February 2015
About 4 years ago

Hi all, I have lost a deposit which the agent was holding when they up sticks and knocked everybody including their own staff. They held the deposit and it was insured through My Deposits. This was a big mistake on my part. My Deposits is there to protect the tenant form the landlord or his agent. Not the land lord form the agent. My deposits were clear on that and when i read the terms which they sent me after the agent had gone that was clear.

I am not sure about the TDS that may also protect the land lord.

I now use the DPS much safer , no fees and the tenant can see where there money is which I know they like.

In Short be careful when trusting the agent with the deposit and above all do not let your agent hold the deposit using My Deposits.

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