Letting agent gone bust with unpaid rent and tenant deposit

[amboworld]

My letting agent has gone bust owing me two months rent they collected from my tenant and also holding the tenant's deposit. they are not a member of ARLA and cannot be contacted. As an ethical person, I want to do the right thing so can anyone advise me if I and responsible to the tenant for their security deposit or it is between them and the letting agent or if there is no specific rule in which case a compromise might be needed.

My tenant is worried and we have already lost a great deal of money - we left UK with a work placement and are not mortgage to let landlords, just normal, fairly skint people. can anyone advise me how to proceed? My tenant wants to stay and I am wondering about dealing direct with them - are there pitfalls and how can I ensure this doesn't all get messier without returning to the UK. Much thanks in advance - James

[Planner]

A terrible situation.

- If the AST still has a period left to run in its fixed term, then theres no option but to let them stay there.

- If the AST has lapsed into a periodic, and you would like them to leave, you need to serve the correct notice. Otherwise theres no harm in them staying and renting dealing directly with you, just tell them the new details of how to pay rent, how to contact you and a contact address in England that they can post things to you at.

- In terms of the deposit, unfortunatley you are ultimatley responsible. You will need to return the tenants deposit and sue the letting agent. However, if the AST began on or after 6th April 2007 it should be in a TDS scheme? - do you know if this is the case?

[amboworld]

Dear Planner,
Much thanks for your reply, however expensive the implications!:o The AST started 15 mar 07, so no joy on the TDS scheme. Luckily, the tenant seems decent enough and has already paid me direct rent for feb08. I am happy to let them stay as they have been good tenants so far. I will offer them a new AST from now to ensure an agreement is in place. I will also start saving for the deposit.

Could you point me in the right direction for sueing the letting agent. It is a little odd, but payments came from a limited company which still appears to be doing some kind of business despite the agents premises being shut up with half drunk coffee cups on desks etc. If I can show the payments came from the limited company, does this mean I can sue them for the breach in your opinion?

Much thanks again for your excellent advice.

James