Estate agent not releasing the deposit to landlord

adeelmpk

Experts

Wondering if anyone else has been in the same situation, I'm a first time landlord so not sure how to resolve the situation here.

I used an internet based estate agency to set up my first tenancy on self managed basis. They found tenants, received the deposit and first month rent from the tenants. They passed the rent to the landlord [me] however kept the deposit and used an insurance based scheme [mydeposits] to insure the deposit themselves. an insurance based scheme means that you pay a small insurance fee for the deposit however hold the deposit money yourself.

However whilst registering the deposit bind they made an error. Instead of securing the deposit declaring themselves as an ESTATE AGENT they secured the deposit bond declaring them as LANDLORD which basically invalidates the mydeposits T&C's and as such deposit isn't protected.

As soon as I found out the error, I requested estate agents to release the deposit money [which they agreed about 3 weeks ago]. Once I receive the deposit from estate agents I can arrange it to be protected correctly myself. However not getting much response from the estate agents since then which is making me paranoid.

Who would be liable for the invalid deposit protection until I receive the deposit funds in my account ? and in case if tenants decide to take a legal action for invalid deposit protection who would be held responsible. And who can I turn up for help if the communication with estate agent fails going further ?

Regards

SerialRenter

Has the deposit never been protected or only incorrectly protected?

All liability rests with the landlord for the protection of the deposit.

If it was never protected then the proscribed information wouldn't have been sent to the tenants, in which case you will be liable.

If it was incorrectly protected and the tenants received their proscribed information, it may be possible to call myDeposits and get the entry edited and the estate agent to then transfer over the money.
Although others will have to clarify if thats possible.

G_M

Have you contacted the scheme yet?

I have to say that allowing an agency, especially an online one) to handle the depsoit at all if they are not going to manage the letting, is asking for trouble.

Even if they had correctly registered it as agents, you would be reliant on them for its release despite having no ongoing contract with them.

adeelmpk

SerialRenter wrote: »

Has the deposit never been protected or only incorrectly protected?

The tenancy started about a month ago and since day 1 the deposit has been INCORRECTLY secured due to the error made by estate agent. As it stands right now, the deposit is still protected and all three parties have a copy of the deposit protection certificate. However due to the error the protection isn't valid.

SerialRenter wrote: »

If it was incorrectly protected and the tenants received their proscribed information, it may be possible to call myDeposits and get the entry edited and the estate agent to then transfer over the money.

I've spoken to myDeposits, the only way they can correct this is to close the existing bond [which only estate agent can do] and set up a new bond with correct details.

I personally would like to use a custodial tenancy deposit scheme [as opposed to a paid insurance based deposit scheme], custodial scheme requires the funds to be transferred directly to scheme however until I receive the funds from estate agent, how can I secure the funds.

adeelmpk

G_M wrote: »

Have you contacted the scheme yet?

I have to say that allowing an agency, especially an online one) to handle the depsoit at all if they are not going to manage the letting, is asking for trouble.

Agree with that, it was never my choice for the estate agents to hold/secure the deposit, they did that without my permission to be honest. As such I have requested the funds to be released however not getting much luck with that. Are these estate agents regulated somehow ???

Pixie5740

Any old Tom, !!!!!! or Harry can set themselves up as a letting agency. They are not regualted, they require no qualifications and no specific training.

I'm sure there are some decent letting agencies out there but there seems to be quite a few who are a pain in the backside for landlord and tenant alike.

EDIT: You might find the the LA you are using is a member of ARLA (membership is voluntary) and that you could escalate your complaint with them.

jjlandlord

However due to the error the protection isn't valid.

Says who?

If it is indeed not protected or PI were not given in time and you ever get sued for non-protection of the deposit you would be able to in turn sue the agent to indemnify you, though.

adeelmpk

jjlandlord wrote: »

Says who?

Says MyDeposit

adeelmpk

Pixie5740 wrote: »

EDIT: You might find the the LA you are using is a member of ARLA (membership is voluntary) and that you could escalate your complaint with them.

I'm afraid they're not members.

On a side note, that's pretty poor these estate agents aren't regulated.

Annie1960

You chose this agent, so you must know what due diligence you did.

You checked they are members of ARLA or NALS or similar, right?

Then tell the agent you are going to complain to whatever trade body they belong to. You may need to go through their internal complaints procedure first.

Annie1960

adeelmpk wrote: »

I'm afraid they're not members.

On a side note, that's pretty poor these estate agents aren't regulated.

Your post must have crossed with mine.

Many letting agents are members of a trade body. It was your responsibility as LL to find out about this and choose wisely. I bet you spent more time choosing your last mobile phone than choosing your letting agent.

As your tenant has not had their deposit properly protected in line with the law, they can claim 3 times their deposit back from you.