What happens if letting agent goes bankrupt

The tenant will be protected, as the tenancy deposit scheme will pay the deposit to them. However the scheme will then look to the landlord ie you! Under the law of agency you are liable for the acts or omissions of your agent. This sort of situation is most likley to occur now with My Deposits, as the Tenancy Deposit Scheme run by the Dispute Service now only accepts agents who are members of recognised professional bodies, and these all require client money protection.

The safest scheme, so far as the landlord is concerned therefore, for the agent to use, is the Deposit Protection Service. Here the money is actually paid over to the scheme administrators, so there can be no question of the agent running off with it. Keep copies of all paperwork My final point is regarding the paperwork. If your agent goes under, you will need either to take over the management of your properties yourself, or arrange for another agent to take over.

This will be much easier if you have copies of all the relevant documents. This should include, particular:. If your agent proves evasive about passing over copies of documents requested, a visit to his office might help, particularly if you indicate that you will not be leaving until you have them.

Strictly speaking the paperwork is yours and you are entitled to it. Hopefully your agent is financially sound, of impeccable integrity, and your properties are safe in his hands. However there is no harm in taking a few precautionary measures. You make a very good point that Landlords need to ensure that they only work with a reputable agent. It also said that the company had collected rent money from tenants, but not paid it to landlords. The resultant effect of successive governments not making client money protection insurance CMP a legal requirement years ago.

Now CMP is a legal requirement there will undoubtedly be more of this type of fraud exposed, as the criminals are weeded out. CMP needs to go further now and include private landlords too. Landlords continue to be attacked: grossly unfair tax treatment, government aiding and abetting tenants to run up arrears whilst Councils continue to pay the tenants the Housing Benefit, increased legislation on landlords' obligations but nothing on tenants' - and no protection from letting agents going bust.

Landlords not entitled to Covid financial support, yet letting agents are. Are the government trying to create a housing crisis? I can see your frustrations but not sure why you're criticising tenants here - doesn't sound like they've contributed to the mess this agent has created.

Maybe it's an argument for another story. It's the go-to impulse and natural reaction from most landlords when in this case the sole focus of blame and anger should be on the letting agent.

They will just open again under a different name with the same directors. Just like a firm in Bristol did a couple of years ago. The Directors have committed fraud by abuse of position here. The investigation will hopefully lead to their arrest, conviction and seizure of their personal assets to compensate the victims of their crimes. Were they an Ombudsman member as required legally - if so, what complaints were filed and if several shouldn't this trigger an investigation or at least flag it with the powers that be?

Also curious and not for one second blaming them - how many tenants actively chased proof their deposit had been registered? How many reported theirs not being and if several again- why did this not trigger an investigation? I assume it is "owing" as they have now been put into liquidation and this is the creditors report, ie: these deposits were largely regsistered so there weren't any tenant complaints.

You would normally only have these things come to light either if everyone wanted their money back on the same day never going to happen , or a business goes bust, as there is always enough money sloshing around in a client account to be able to give the next person, or next 10, their deposits back.

I have seen client accounts with bigger holes than this that were still happliy trading, and noone was any the wiser to the problem. Is anybody surprised? There are too many agents living on the edge of financial misappropriation i.. Please confirm you wish to report this comment as abuse.

Residential searches and enquiries. Residential tenancies. Residential transfers. Sign-in Help. Where a letting agency has gone into liquidation, who would be liable for deposits which the letting agency has lost if the agency's tenancy deposit scheme insurance will not cover the deposits because of the conduct of the tenants?

Access this content for free with a trial of LexisPSL and benefit from: Instant clarification on points of law Smart search Workflow tools 36 practice areas. Back Step 1 of 2 Basic information. Step 1 Step 2 Name. Miss Mrs. Name Click to edit. Name No Content These fields are required.

Email Email id Click to edit. Email No Content This field is required. Job role Click to edit. Job role No Content This field is required. Job title. Job title Click to edit. Job title No Content This field is required. Company Click to edit. Company No Content This field is required. Country Click to edit. I've spoken with the tenant directly and he has given me proof of payment of the rent up to date.

He also commented that he hadn't received confirmation from the agent that his deposit had been secured. I don't know what the company did with the deposit money.