The case of a letting agency wound up for failing to protect rents and deposits shows how important it is for landlords to follow the rules.
The Leamington agency, Telmark Properties, formerly Smarter Housing was wound up by the High Court for repeatedly breaching agreements with both landlords and tenants and failing to deal properly with its tenants’ deposits.
The company was wound up on public interest grounds after an investigation by the Insolvency Service. Company investigations supervisor Chris Mayhew said: “Money that should have been protected was instead used to fund this company’s business.
“Student tenants who could least afford to have their money unfairly withheld and who believed their rent deposits were secure, suffered as a result.”
The grounds for winding up the company were that it failed to protect deposits received from tenants in accordance with an authorised scheme. It failed to collect and or pay rent totalling at least £204,346 to landlords, failed to file accounts and annual returns, failed to maintain proper accounts and present these to the investigator, was insolvent and had been abandoned, having effectively ceased to trade in August 2010.
Since April 2007 landlords have had to register deposits with a government approved scheme. So far, deposits worth more than £900m have been protected. This is to safeguard deposits and ensure they are returned quickly at the end of the tenancy if there are no rent arrears and if the tenant has kept the property in good condition.
Landlords are running a massive risk if they fail to register a tenant’s deposit. If you are looking to serve a notice of eviction on your tenant the deposit has to be registered.
Legal 4 Landlords has teamed up with the MYDEPOSITS government deposit registration scheme. If you choose to use this scheme, to obtain a discount please quote LEG001. Give the Legal 4 Landlords team a call if you have any queries.