Can't get deposit back - please advise.

sa2uk

Hi,

My partner is having some problems getting his security deposit back on his previous flat and I would appreciate it if anyone had some advice. It's a bit of a saga but I will attempt to keep it as short as possible.

He paid the security deposit to the letting agents, T. They were supposed to pay it to the managing agent, IP, but the contact at IP gave T the wrong account details and the deposit ended up being paid to an unrelated party, PC instead (possibly the contact at IP was employed there previously).

Then the landlord went bankrupt and flat went into receivership. After many months of contacting T, IP and PC my partner now knows that PC has the deposit but they will not release it as they don't have proof it belongs to him.

As no-one has been able to help he has decided to take it to small claims court. He has started the process already, but is starting to doubt himself.


He is suing the managing agent IP, for the following reasons:

• They were responsible for handling his deposit, and for paying it into a Deposit Protection Scheme.
• It was their incompetence that resulted in the deposit being lost. They supplied the wrong bank account details to the letting agent, and what's more they should have realised sooner that the deposit never reached them, especially when they are legally obliged to pay it into a DPS within 14 days. It took them three to four months, and even then only because the landlord had gone bankrupt and he was hassling them to get it back
• They are the only people that he has a contract with. His tenancy agreement clearly states that the contract is between him and IP acting as the agent for the landlord.

Is he suing the right party?? It is pointless going after the landlord as he is bankrupt.

Thank you for reading, and for any advice you may have!

N79

Are you sueing for the deposit or deposit plus non protection penalty? It matters.

If just the deposit then

Join the new LL to the action (whoever the official receiver appointed) as well as the property centre as in reality only the new LL is liable to repay the deposit. However, once in court, you may well find that the property centre agree to release the deposit to you once the court confirms that it belongs to you.

If deposit plus penalty then

Join the new LL to the action (whoever the official receiver appointed) as well as the property centre. You have an good chance but you will need to do your homework as the agents will probably file a defence that the LL was responsible for deposit protection. You can site Draycott vs Hannells to counter that defence (a case you need to read, reread and then read again until you have learnt the judgement by heart) but you will need to present as much evidence that you can to meet the test to show that the agents should carry the liability. This test is explained in the judgement.

By joining the new LL if your action for the penalty fails you can still go for a judgement on the deposit against the new LL and / or the property centre as above.

sa2uk

Thanks for that. How would he go about joining the new LL to the action? Does it matter that he has moved out of that flat already? At the time he left it was still under receivership and a new LL had not been appointed.