Letting Agent Never Launched Deposit with Protection Scheme

tg1897

I am having an issue with retrieving a deposit from an agent called Northwood.
The local branch (which has subsequently closed and gone into liquidation) never launched the deposit with the scheme (mydeposits) as they said they had. The company is UK wide, but conveniently state that each branch is an independent business so they have no liability.
The tenancy has now ended and we are looking to secure the money back, but there are no records with mydeposit of it ever being lodged, and I have no proof except the tenancy agreement. I am the landlord and now find myself in a rather tricky situation.
Any advice?

Pixie5740

This wasn't one of those Northwood Letting guaranteed rent schemes was it where Northwood is your tenant and then Northwood sublet the property? If so then the fact Northwood didn't protect the deposit is not your issue.

If on the other hand Northwood acted as your agent and the people living in the property were your tenants it is still your legal responsibility to protect the deposit and return the deposit at the end of the tenancy.

You say the deposit is not registered with mydeposits but have you checked the other two schemes as well?

theartfullodger

NB Shame: (I'm also a landlord, but decided not to go with Northwood after establishing they were each independent....)

You say the "tenancy has ended" - do you mean fixed term ended or do you mean someone gave notice & tenant has gone?? (I'll assume former)

Your best bet (unless you can find it in another scheme ) is to immediately return it (yes I know you don't have the money) - in full - to the tenant? Why? Well....
a) Unless you do so you won't be able to serve a valid s21 &
b) You'll be praying is tenant sues you (yes, YOU ! You were responsible..) for penalty for not protecting deposit - up to 3xdeposit - the judge might take pity on your prompt return.

Was the branch a Ltd co? If so get directors home addresses (maybe) from Companies house & drop round for a free-and-frank discussion of the realities of life. I'd then pursue the scr*ats for the rest of their natural: Probably ripped off several other landlords & tenants.

The little t*rds...

Which branch, pray?

Also write (yes, WRITE! - keep copy) to tenant instructing them where to pay money in future. I'd drop round (warn them 1st..) for a chat about anything needing fixing. Got copies of all paperwork?

NB If not all paperwork a cunning plan is to offer tenant a new AST & all other paperwork for a lower rent. That way you can get back onto an even keel and go forward confidently, at least from start of new tenancy.

Better luck next time.

tg1897

The agent did everything for a finders fee- no rental income guarantee or anything. Just tenant intro, inventory, AST etc.

Brighton branch!

Tenant has moved out and gone back to his home country, so not likely that we'll get into a dispute. I guess I'm more surprised that this kind of thing can happen! I thought going through an agent was the safe way to go.
I suppose, that if it did go to court then I would simply state that I never received any deposit to protect.

theartfullodger

tg1897 wrote: »

The agent did everything for a finders fee- no rental income guarantee or anything. Just tenant intro, inventory, AST etc.

Brighton branch!...

Sorry...

....Tenant has moved out and gone back to his home country, so not likely that we'll get into a dispute. I guess I'm more surprised that this kind of thing can happen! I thought going through an agent was the safe way to go. ...

Good, sounds better...

...I suppose, that if it did go to court then I would simply state that I never received any deposit to protect.

Won't help: As landlord you (yes YOU!) were responsible, even if you never saw the money...

G_M

I'm afraid you DID receive the deposit so far as the law is concerned. The tenant paid it to you via your appointed agent.

The fact that your agent let you down does not alter the facts that

a) your tenant paid you £X
b) you must return £X to the tenant (less any valid deductions)
c) the tenant could claim the penalty of up to 3 times the deposit off you

As landlord, it was your legal responsiblity to ensure it was properly registered in a scheme.

If you can't sue the agent (no longer in business) then you'll have to write it off and repay the tenant from your pocket.

ps

The local branch ..... never launched the deposit with the scheme

I love that image. Hundreds of deposits quietly orbiting the atmosphere until recalled to Earth as tenancies end......