Ash Residential Property Management - "Mydeposits"

Flood2013

I have a property I rent out.  I used a Letting Agent to find my tenant, reference, prepare the contracts and lodge the deposit. I then liaise with the tenants on any issues and they pay me directly.

Out of the blue I have received a letter informing me that my Letting Agent had used a third party company, (Ash Residential Property Management) to do all the administration, including lodging the deposit!!  You guessed it, ARPM, have now gone into administration. The whereabouts of the tenants deposit is unclear!!

I have confirmation that the tenants deposit was lodged and the certificate was issued to my tenant. So, as you can imagine, I am not a happy bunny with mydeposits, who are saying as a landlord the deposit is my responsibility, which I know, but if its in their scheme, and they don't know where the money is, how can I be responsible.  Its a government approved scheme so surely I am protected?

Can anyone help me? Any ideas what I should do? Thanks

Snookie12cat

Flood2013 said:

I have a property I rent out.  I used a Letting Agent to find my tenant, reference, prepare the conty racts and lodge the deposit. I then liaise with the tenants on any issues and they pay me directly.

Out of the blue I have received a letter informing me that my Letting Agent had used a third party company, (Ash Residential Property Management) to do all the administration, including lodging the deposit!!  You guessed it, ARPM, have now gone into administration. The whereabouts of the tenants deposit is unclear!!

I have confirmation that the tenants deposit was lodged and the certificate was issued to my tenant. So, as you can imagine, I am not a happy bunny with mydeposits, who are saying as a landlord the deposit is my responsibility, which I know, but if its in their scheme, and they don't know where the money is, how can I be responsible.  Its a government approved scheme so surely I am protected?

Can anyone help me? Any ideas what I should do? Thanks

My deposits does both insured and custodial scheme. If it was registered with the insured scheme which it likely was the money is held in the person's client account and not directly with the scheme. My deposits will have no liability over the money as they never got it. The government scheme protects the tenants money only, not yours.

I used to work in a letting agent who bought a falling competitor and they didn't transfer over many of the deposits before going under. The end result was the to agent or landlord had to foot the bill for the missing bonds. 

As it's ultimately your responsibility if the money doesn't come from the company then you will need to pay the tenant back when they leave.

Can you not hold your agent liable for this screw up and try to get them to replace it/agree to cover it?

TripleH

The tenant's deposit should be held in a separate 'client account' and shouldn't be used for any purpose at all until the tenancy ends.

You need to get onto your letting agent and ask where it is (that they used a 3rd party is irrelevant to you unless you signed an agreement with the 3rd party). Don't let them fob you off by telling you to chase elsewhere, politely but firmly press for answers to your questions. Advise them that spending money from a client account without consent is a serious breach.

Is your letting agent registered with a trade body, as I'd contact them as well.

Ultimately when your tenant leaves you may have to refund any deposit out your own pocket in the short-term if you are still chasing funds from your letting agents.

Flood2013

Thank you both.

JMLS

Hi. I'm in a similar position to flood2013.

Is there a landlord group anywhere that is getting together on this? Apparently it's affected thousands of landlords! 

Other deposit services have insurance against agent bankruptcy and ARPM does too. However, they seem to think that their insurer might try to recover the money from the landlord if the insurer pays out. 

There's clearly a gap in the law here and I'd be really surprised if a court found the landlord liable. The tenant could be directed to recover (some of) their money front the liquidator, for example. 

Snookie12cat

JMLS said:

Hi. I'm in a similar position to flood2013.

Is there a landlord group anywhere that is getting together on this? Apparently it's affected thousands of landlords! 

Other deposit services have insurance against agent bankruptcy and ARPM does too. However, they seem to think that their insurer might try to recover the money from the landlord if the insurer pays out. 

There's clearly a gap in the law here and I'd be really surprised if a court found the landlord liable. The tenant could be directed to recover (some of) their money front the liquidator, for example. 

Unfortunately it doesn't work like that. The schemes specifically state the landlord has ultimate liability for it as it's registered in their name. The tenants will always get their money back and the landlord will get screwed over in situations like this.

Pixie5740

JMLS said:

Hi. I'm in a similar position to flood2013.

Is there a landlord group anywhere that is getting together on this? Apparently it's affected thousands of landlords! 

Other deposit services have insurance against agent bankruptcy and ARPM does too. However, they seem to think that their insurer might try to recover the money from the landlord if the insurer pays out. 

There's clearly a gap in the law here and I'd be really surprised if a court found the landlord liable. The tenant could be directed to recover (some of) their money front the liquidator, for example. 

The tenant has a contract with you, the landlord, not your agent and not some 3rd party your agent uses. The deposit is the tenant’s money and you are ultimately responsible returning it at the end of the tenancy. If you then have to chase your agent since you’re the one with a contract with the agency that’s down to you to do, not the tenant. 

TripleH

The landlord may end up out of pocket BUT the question is 'why were these deposits not held in a client account and what has gone wrong here?'

There should be enough in the client accounts for all deposits to be covered, that there isn't, for me, would set alarm bells ringing as something has gone wrong.

Check your contract to see if it saysca thirdvparty will used, if not then you claim off the letting agent, that they used a third party is irrelevant to you. Might also be worth raising concerns about misuse of client money. If the agents are registered with any professional bodies, that should be your first port of call.

HEDWAR

Flood2013 said:

I have a property I rent out.  I used a Letting Agent to find my tenant, reference, prepare the contracts and lodge the deposit. I then liaise with the tenants on any issues and they pay me directly.

Out of the blue I have received a letter informing me that my Letting Agent had used a third party company, (Ash Residential Property Management) to do all the administration, including lodging the deposit!!  You guessed it, ARPM, have now gone into administration. The whereabouts of the tenants deposit is unclear!!

I have confirmation that the tenants deposit was lodged and the certificate was issued to my tenant. So, as you can imagine, I am not a happy bunny with mydeposits, who are saying as a landlord the deposit is my responsibility, which I know, but if its in their scheme, and they don't know where the money is, how can I be responsible.  Its a government approved scheme so surely I am protected?

Can anyone help me? Any ideas what I should do? Thanks

Hi Flood2013, 
I appreciate this is an old post and you may well be over it. However I find myself in the exact same position with Ash (never heard of them until today) and wondered if you would mind sharing how you got on? I contacted Ash liquidators and they said I would need to contact the liquidators for the Agent I dealt with (who subsequently passed the funds on to Ash Residential without my knowledge). I hope things worked out for you. Thank you.