Letting agents raided over £1m last year in tenants’ deposits, a BBC investigation has alleged.
BBC Inside Out South West spoke to nine tenants in its area, plus seven landlords, who are collectively owed almost £35,000 by agents.
According to the investigation, 14 letting agents were convicted of stealing £1,018,100 in deposits last year.
The claim seems to echo a press release from last October when north east letting agent Ajay Jagota claimed that 14 rogue letting agents had been convicted of stealing over £1m worth of tenancy deposits so far in 2016.
Tory MP Oliver Colvile, who represents Plymouth, Sutton and Devenport, and who has campaigned for tenants’ rights, told the BBC: “I think this is appalling and clearly there needs some action to be taken on all of this.”
Comments (16)
Once again this is presented as a if tenants had lost money where in fact it is landlords who have.
If an agent steals tenancy deposits money then the landlord is still liable to his tenants who haven’t lost anything at all.
Landlords should really handle tenancy deposits themselves.
Spot on Romain.
This is a concept that a lot of landlords do not appreciate and is up to us letting agents, and propertymark, to make them aware of this and why they should ensure their chosen letting agent has CMP in place. It is not just deposits but rent as well, how many agents receive six or even twelve months rent in advance.
Hey Romain, what if the landlord doesn’t reimburse the tenant? Who has lost the money?
Please grow up.
Hello Rent rebel, in this particular case, tenants have lost their money, believe it or not, this company is still trading and until this morning was still showing as a member of ARLA’s website!As it is still trading but refusing to hand over monies owed
As it is still trading but refusing to hand over monies owed little the victims can do until a full investigation is conducted. I believe both trading standards and police are investigating.
A simple idea, is for the tenant to lodge the deposit with a scheme, provide you with a certificate, you go online and place a “charge” against the deposit during the tenancy, and then provide proof if the deposit needs to be claimed against.
No need for prescribed info, as they will know the scheme, no worry about being outside the 30 days and all the pain in the backside stuff that comes with deposit legislation (for the agent and landlord)
Simple!!! far from it; and the landlord will still be in breach of deposit protection legislation.
please explain Peter?
why would you even need deposit legislation beyond legislating that a landlord or agent cannot physically take one?
I read your initial post as still taking a deposit but the tenant deals with the protection requirements rather than the landlord. However, in this situation the landlord is still in “receipt” of a deposit so must therefore comply with the initial requirements. You said “is for the tenant to lodge the deposit with a scheme” although I must confess to be somewhat confused by “place a “charge” against the deposit during the tenancy”
Thanks Peter
My definition of a charge was a little like a land registry charge. Obviously only one charge can made against the deposit at any one time by an agent/landlord, and if it needs to be claimed against, then the tenant would need to top this up before they moved to a new property. If and when the tenancy ends, then the charge can be removed by mutual agreement if no claim was to be made.
Personally, if you had this type of system, then would not need to worry about the current legislation on “receipt” etc, as this would no longer be relevant.
Conservation with the applicant would be simple, please place £1000 into one of the three approved schemes, let us know the scheme and your ID number. Agent would login, place a request for a charge to be lodged against the deposit for the relevant tenancy/property. Applicant then would log back in and approve such a request. At the end of the tenancy, they can mutually agree for the “charge” to be removed or the landlord/agent can claim against the deposit a little like the current system.
For me, removes the prescribed information requirement as the tenant is in control of their own money and all the risks of the 30 days and a definition of a new tenancy etc.
Sorry, but do not see that the legislation in its current form will release the Initial Requirement procedures that a landlord must undertake in the scenario you mention. The landlord does not need to physically receive a deposit where a deposit is required. As such, a tenant lodging the deposit will be interpreted by the legislation that the landlord “received” the deposit.
Is this not though academic; what scheme allows a tenant to lodge a deposit?
Talking in hindsight Peter
I think the tenant lodging the deposit would have been a better idea than the landlord being obligated to do so
you would have certainly not had the same risks of non compliance
We have just inherited some clients from a local agent who was a member of a custodial scheme. The agent in question would give a receipt for the deposit, complete the tenancy agreement properly, tell the landlord he had the money, but then fail to issue a certificate or place the deposit in the scheme altogether!
Hello paul could you contact me?
If they were stealing deposits then they must have been using an insured backed tenancy deposit protection scheme which would typically require the agent to be a member of a trade body and have CMP. If they were trade body members they should have been audited.
If they were not doing any of the above then it’s another example of how the sector needs licensing. If they were then it’s another example of how weak these so called audits are.
Wales and Scotland are making CMP mandatory. Why are we so far behind? Especially when we keep on seeing articles like this year after year.
Ban non custodial schemes …..client deposits should not be held in agents or landlord bank accounts as this is a major temptation to use the funds illegally. Surley Insurance schemes are a better way forward to help tenants cash flow providing insurance premiums are paid!!
CMP wont stop these rouge agents from stealing client money. Ban these people from being directors or owners of businesses. This is one of many areas the government could sensibly help tenants (and the industry) instead of the ill thought out proposed ban on letting agent fees.