Where's my daughter's deposit gone?

eDave_2

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Previously posted in Discussion Time Thread
Someone there suggested it may be better suited here...

Hi

Hope you can advise on where my daughter stands in the following scenario...

She is being asked to leave her rented house, as the owner is being made bankrupt and his properties are being repossessed to pay-off creditors. She has another place to go, luckily, but the agent who handles the rental have said they have given her £600.00 deposit to the creditors.

Naturally, she's upset and cannot understand why her money has not been returned to her.

Any advice would be gratefully received!

thesaint

When is she moving out?

Is there an inventory?

Has she been given a date for the bailiffs to arrive?

silvercar

This doesn't totally make sense, people aren't repossessed the minute they go bankrupt. Although both show severe debt problems the two are not interchangable.

If the agent is still holding the deposit he has no right to give it to the landlord's creditors. If the landlord has gone bankrupt then the deposit could be swallowed up with his debts. Your daughter would then be a creditor and should register as such with the Official Receiver's office handling the case, she would then get the same proportion of the debt returned as other creditors. If the landlord is being repossessed and hasn't actually gone bankrupt your daughter could him pursue through the small claims court for the deposit money.

epz_2

has she given up possesion, if not i would refuse to leave till the rental period has covered that amount or just take all the furniture and stick it on ebay.

Gold_Shogun

silvercar wrote: »

If the agent is still holding the deposit he has no right to give it to the landlord's creditors. ... I agree

If the landlord has gone bankrupt then the deposit could be swallowed up with his debts. Your daughter would then be a creditor and should register as such with the Official Receiver's office handling the case, she would then get the same proportion of the debt returned as other creditors

I strongly DISagree with the second part of your post ... Under almost any normal Tenancy Agreement, a deposit is effectively held "In Trust" on behalf of the Tenant/Depositor against any shorfall or damages ... As such, it would NOT legally constitute an "asset" of the LL or Agency, and MUST be returned if there are no legitimate reasons for deductions.

Gold_Shogun

eDave wrote: »

... but the agent who handles the rental have said they have given her £600.00 deposit to the creditors.

Naturally, she's upset and cannot understand why her money has not been returned to her.

She should send a Recorded Delivery letter to the Agents advising that they are not permitted to pass the "In Trust" deposit onto any Creditors of the Landlord, and that the Agents taking that deposit remain legally liable to the Tenant for the return of said deposit upon termination irrespective of whether the agent may have "unilaterally chosen" to give the money to a 3rd party unconnected with the Tenancy Agreement.

withabix

The agent has taken your money illegally.

silvercar

Gold_Shogun wrote: »

I strongly DISagree with the second part of your post ... Under almost any normal Tenancy Agreement, a deposit is effectively held "In Trust" on behalf of the Tenant/Depositor against any shorfall or damages ... As such, it would NOT legally constitute an "asset" of the LL or Agency, and MUST be returned if there are no legitimate reasons for deductions.

The second half of my post assumed that the agent had passed the deposit to the landlord at the start of the tenancy. This is normal behaviou if the landlord is managing the property himself and using an agent only to find a tenant. In practice this usually means the agent takes his commission from the deposit and passes the remainder to the landlord. The landlord is holding all the deposit but doesn't see it in notes as the commission has already been taken out of it. The landlord is responsible for the deposit but the money is not actually held separately. Therefore, for a landlord in debt, there is nowhere to actually retrieve the money from. The small claims court may focus his mind on finding the money, unless he actually is going bankrupt in which case the tenant would be a creditor.

RHemmings

Gold_Shogun wrote: »

She should send a Recorded Delivery letter to the Agents advising that they are not permitted to pass the "In Trust" deposit onto any Creditors of the Landlord, and that the Agents taking that deposit remain legally liable to the Tenant for the return of said deposit upon termination irrespective of whether the agent may have "unilaterally chosen" to give the money to a 3rd party unconnected with the Tenancy Agreement.

I wonder if the "creditor" that the deposit was passed to was the agents themselves.

olly300

eDave wrote: »

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but the agent who handles the rental have said they have given her £600.00 deposit to the creditors.

If the agent who handles the rental manages the property i.e. is responsible for sorting out repairs and taking rent payments for the landlord, then send a letter as Gold_Shogun said but put on the title of the letter " letter before action" and at the end ask for the deposit back within one month of the date of leaving the property otherwise further action will be taken including court action and they, the managing agent, will be liable for any costs and interest. Put exact dates on the letter.

After leaving the property wait a month and if the deposit is not returned take small claims action against the managing agent for withholding or passing on the deposit to a third party. You don't need to contact the agent again.

eDave_2

This is great stuff, guys...this issue has upset my daughter a great deal and it's great to know there's help at hand on here!

You've been great - thanks!