Letting Agent Fail: Landlord faces £5,000 fine

A landlord is facing a £5,000 fine after her letting agent missed the deadline for protecting the deposit by several months

Deposits must be placed in a government approved scheme – Deposit Protection Service, MyDeposits or Tenancy Deposit Scheme – within 30 days, but the landlord’s agent didn’t place it in a scheme until six months after receipt. 

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During the tenant’s 18 month stay, he caused water damage to the property, so the landlord, who wishes to remain anonymous, sought to deduct payment for the damage from the deposit, via the deposit schemes redress process.

While the landlord was successful in deducting some of the deposit, the tenant discovered his deposit had not been protected within the required 30 days. He has now taken the landlord to a First Tier Property Tribunal, looking to claim up to three times his monthly rent as compensation for this failure.

While landlords have recently been in the news for locking out their tenants or ignoring demolition orders, this case shows how important it is for landlords to understand their responsibilities and ensure their agents are meeting their obligations.

Who is liable?

As this was a failing on the side of the agent, the landlord spoke to them to request that they foot the bill for any compensation granted to the tenant. But the agent refused to get involved, falsely claiming that it is the landlord who is solely responsible, not the agent. To add insult to injury, the letting agent went bust shortly after the tenant left the property and while it has started trading again under new ownership, it claims the dispute is with the previous owners.

The landlord has also struggled to get any information from the deposit scheme, so is unable to confirm that it was her agent who submitted the deposit late, leaving her feeling she has nowhere to turn:

I feel everyone involved, be it the deposit protection scheme or the letting agents, have all left me high and dry to face this vindictive tenant alone. Where am I going to find £5,000?

It’s important for landlords to understand their responsibilities and not assume that they are completely protected because they are working with an agent. The landlord and agent are jointly responsible for ensuring that the deposit is protected, so if you are working with an agent, you must be sure to chase them up and get confirmation in writing that the deposit has been protected within the 30 day deadline. 

How can I protect myself?

There are a few ways to ensure you don’t find yourself in this position:

  • Check in with your agent. While you may have chosen to work with an agent to reduce the workload on your side, you are responsible for making sure that your agent is doing everything they should. Check in with them to make sure they have protected the deposit and given the Prescribed Information to the tenant (this explains where and how their deposit has been protected). You should check with your agent that all legal obligations are being fulfilled, not just regarding deposits
  • Educate yourself. Make sure you know exactly what you and your agent are responsible for and keep on top of things. If you are worried that your agent is letting you down, you can join our webinar on Friday 11th March to learn more (if you missed it live, you can catch up with the recording on join.mashroom.com)
  • Consider Deposit Replacement Schemes. An increasingly popular alternative to traditional deposits, Deposit Replacement Schemes spread the cost for the tenant and give the landlord more cover
  • Go self-managed. If you are going to have to check in with your agent to make sure they’re doing all they can, maybe it’s better for you to go self-managed instead? A platform like Mashroom offers listings and rent collection for free. If you use a Document Storage tool, you’ll be reminded when your certificates need renewing and an Expense Tracker makes it easy to see your income and outgoings at a glance 

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