UK Landlord Forum / Life

July 2008 I used a Management Company named 'M' to find tenants and manage the tenancy.The director 'A' lodged the four figure sum deposit with the DPS as stipulated in the  Assured short-term tenancy agreement contract. 

December 2008 ( whithout my knowledge or concent,  Director 'A'
Contacted my tenants ( I have copies of e-mail) and told them
company 'M' wanted them to transfer the deposit from the DPS custodial scheme into an insurance based scheme MY DEPOSITS "for ease of access, better customer service and quicker return of the deposit at the end of the tenancy"  . Director 'A' asked my tenants for the DPS access codes. Being suspicious, my tenant asked for the MY DEPOSITS registration confirmation, this was given by director 'A' and my tenants then gave them the access codes and the £1500 bond was paid by bank transfer into
Company 'M's' account. Director  'A' then gave my tenants the MY DEPOSITS insurance certificate number. My tenants and Director 'A' did not inform me about this.

In  January 2009 The tenants rent was not paid by company 'M'. I contacted them by e mail and then by phone and thought I was dealing with director 'A' . I discovered that I was now in fact dealing with a new director 'B' who had bought company ' M' from director 'A'.  Director 'B' told me that he was having difficulty getting the rent money off director 'A', his excuse being "we are setting up new bank accounts and awaiting new pin numbers" . This went on for 2 months.

I alerted my tenants and they stopped paying the rent to company  'M' and paid future rent to me. Finally I visited company 'M's'office, told agent 'B' that I no longer wanted them to manage the tenancy and paid several months fees up front to end the management of my property. I told director  'B' I was very unhappy with the service and that director 'A' had not informed me he had sold company 'M'. Director 'B' told me that he did not know agent A's whereabouts and that he owed him money. Finally, agent 'B' handed over the tenancy file. He told me that the details of the access code pins for the deposit were in the file, he said I just needed to "phone up with the codes at the end of the tenancy and the money would be released.

Still thinking the bond was in the DPS custodial scheme, I flicked through the file, saw the original
Signed contract plus inventory etc. At this time I did not know much about the tenancy deposit scheme, so I took director 'B's word for it.  I just felt relieved that agent 'B' had given me the 2 months rent owed and that I was now in control and would manage the tenancy myself.

All was well until September 2009, my tenants informed me that they had received a letter to say that company 'M' were no longer part of the MY DEPOSITS insurance based scheme. It was only then that it came to light that my tenants had given the access codes to director 'A'. It transpires that company 'M' ceased trading in
July 2009.

Despite sending several solicitors letters and e-mails at the time to BOTH directors who were blaming each other, I have got no further. However, recently after doing some detective work on the internet, It transpires that director 'A' is now a director of a successful agency in the same city.

A month before the tenancy was due to end,  I paid agent 'A' a surprise visit at one of his plush bustling agency offices. His face nearly fell through the floor when I asked to speak with him about this matter.He told me that he would meet with me at another location that night. We discussed everything. He blamed the other director, saying that he was also out of pocket because director 'B' owed him a four figure sum of money.  I told him that he should have informed me about selling the company and that he had basically broken the terms and conditions of the original contract by moving the deposit from a Custodial to an insurance based scheme without my permission. He told me that in hindsight this was a mistake. I told him that my tenants were extremely upset and annoyed about this and would assist me in taking this matter further with the police or courts if necessary as the money has gone missing which was tantamount to fraud and theft. I told him that ARLA might also be interested to know that one of their agents (him) had acted in this way. He then threatened to sue me for deformation of character and said that if it went to court, it would become "really nasty". I said fine and that the police and the magistrates would deal with it. He then went on to say that he needed this " like a hole in the head" and that a gentleman's agreement before things escalate involving costs to both sides might be the way forward. I told him I would try and get in touch with agent 'B' . He said he would e-mail me a mobile number for agent 'B'.
He also told me that an ex tenant of his had got the fraud squad investigating agent 'B' and that he could not remember the name of the fraud officer dealing with the case. He gave me a contact for this tenant. I have spoken to them and it sppears that this was the case but they were reluctant to disclose details. Director 'A' gave me a mobile number and the address for Director 'B' but despite leaving several messages on his answerphone and notes through his door, I  have been unable to make contact and they have not replied to my letters sent to their home address.  Seemingly, on googling Director 'B'  I discovered that they had been convicted and jailed for a serious offence 6 years previously and were a multiple millionaire property developer at home and abroad.

I have now told agent 'A' that I am ready to go to the police and that trading standards have advised me to pursue the former directors through the courts. I have given Director 'A' plenty of opportunity to settle this matter amicably with a gentleman's agreement but they continue to insist they had no involvement or liability for the missing deposit.

The tenants have now moved out and I am in the process of paying back their £1000+ deposit out of my own pocket. I am furious that the money has gone missing, theft or fraud (in my opinion) by BOTH jformer company directors of company 'M' . What makes matters worse is that my tenants have left the house in a terrible state. There is (in my estimation) way in excess of the four figure sum bond needed to get the house to the standard at the start of the tenancy agreement. My tenant is pressing me for the bond and has offered to pay a third of the amount within 7 days, threatening to claim for 3 times monthly rent as they claim the bond was not properly protected. My head is spinning, any advice would be greatly appreciated.