Landlord Wont Give Back Bond

[Aequitas]

You say the contract is with 4let.co.uk. If you mean this literally and 4let.co.uk is named in the tenancy agreement as the landlord then the contract is with them. They owe you all the obligations on the part of the landlord set out in the agreement. You can sue them for the return of the deposit. It does not matter who the "true" landlord was or is now.

[jec]

Hi ed999

 

Wow you don't mince words and I like it!!

 

Sure it seems dodgy and hind sight is always best, but they were naive and there you go. I will get onto Cardiff County Council trading standards Monday am for sure, after all it was my husband's and my 250.00.

 

I have named and shamed if it helps other's from Cardiff who may happen upon this.

 

Many thanks

Jec

[jec]

You say the contract is with 4let.co.uk. If you mean this literally and 4let.co.uk is named in the tenancy agreement as the landlord then the contract is with them. They owe you all the obligations on the part of the landlord set out in the agreement. You can sue them for the return of the deposit. It does not matter who the "true" landlord was or is now.

I will contact trading standards and take it on on bealf of my daughter, then, Thanks for help it is really appreciated!

[Aequitas]

If it were quite literally true that a stakeholder cannot release a deposit without both parties' consent then it is open to either party to block its release; that would make it useless as a form of security for the landlord and unfair to a tenant not in default.

 

Clearly the first step an agent should take is to seek both parties' consent and if it is forthcoming there is no problem. I think it is a risky strategy to assume implied consent following no response to a "if we do not hear from you within x days we shall assume consent is given" letter. Seven days is certainly too short.

 

If one party refuses to give consent, then the agent needs to use his discretion. If the case is clear cut the agent can release the deposit. If there is doubt then the agent may retain the deposit until the matter is resolved. I do not think that this necessarily means that the agent can sit back and do nothing since his duty is to administer the deposit in accordance with the terms of the agreement and he must, so far as he is able to, conduct his own investigation. This will usually be easier for an agent who has actively managed throughout. There will of course be cases where the agent is unable to make a decision and I do not think the court would penalise an agent who had made a reasonable attempt to resolve the matter. It is in fact open to a stakeholder to apply to the court for directions as to how to deal with a deposit, but given the amounts usually involved that is rarely a practical option.

 

Disbursing a deposit without consent always involves a degree of risk, but if the agent is unwilling to accept such risk he should not hold deposits - though that is now academic for ASTs in view of the new arrangements.

[Aequitas]

But, as a matter of the law of agency, the tenant has to sue the landlord, not the agent.

 

I do not think that is right. If an agent holds a deposit as stakeholder and either

 

(a) passes it to the landlord when he should not have done; or,

 

(b) declines to return it to the tenant when it should be paid to the tenant,

 

then the tenant may sue the agent. The whole point of a deposit being held as stakeholder is the protection that it gives to the person paying the deposit - the assumption of course being that the stakeholder is a professional person of integrity in whom the person paying the deposit may repose his trust. (I make no observation on the fact that The Estate Agents Act 1979 forbids estate agents from holding other than nominal deposits in property transactions.)

[jec]

Just had in depth with trading standards and they are very ineterested in 4 let already. They advise I fire off letter to them. Can anyone Aequitas?? or Esio Trot?? or any one else please assist to get the letter right so I get it 100%????????? PLEASE

 

Many thanks

Jec

[jec]

Here is a letter I am bashing about with. It of course needs help. So any appreciated. Jec

 

4 Let

 

10 September 2007

 

 

Dear Sir/Madam

 

I entered into an Assured Tenancy Agreement with you to rent 18 anywhere street Cardiff from xxx to xxx. As per a condition of the Agreement I paid you a 230.00 bond as deposit. I assumed that my deposits by law should have be held as stakeholder. Your legal duly of care to me was breached when you failed to safeguard my money. You admittedly gave my deposit at the first instance to the landlord. My deposit was not an ‘extra payment’ or ‘bonus’ for you to give to the landlord at will. It was my money and a bond in case monies were left owing or property was damaged at the end of my contract regardless if it was ‘let only’. Concerning deposits as a point of law it is of no interest in this situation what other arrangements or contracts were made privately between you and the landlord.

 

All other co-tenants of 18 anywhere street received their bonds back in full except myself. I fully met the terms and conditions of my contract. I left owing no outstanding monies; my room was cleaned and undamaged. I have photographic documentation of the house to verify.

 

Upon thorough advice of Cardiff Trading Standards (who are investigating this matter and your practices regarding stakeholding), I hereby give you 14 days to safeguard the return of my withheld bond. For the avoidance of doubt, if this is not done within 14 days, I will commence my claim in the courts without further warning. This action will inevitably involve you in additional costs plus repayment three times my original bond as per County Court directives.

 

I also hereby request a detailed report of which clause in the terms and conditions of my signed contract that you have applied in this instance for future court proceedings.

 

 

Your Sincerely

[Esio Trot]

Firstly, may I suggest that you modify your post above and delete the specific references to the particular agent and the actual property.

 

Dear Sir/Madam

 

I entered into an Assured Tenancy Agreement with you to rent xxx xxx Roath Cardiff from xxx to xxx. As required under the agreement I paid 230.00 deposit which you were to hold. The agreement is silent on the status of how you hold the deposit, and I am advised that in these cases it is deemed to be held as stakeholder.

 

In law, you have a duty of care as stakeholder as you act in a quasi-trustee manner.

 

You have already informed me that you have forwarded the deposit the landlord. Therefore you are in breach of your duty of care as you have disposed of my money without my consent.

 

I have no option but to demand that within 14 days you recover the deposit from the landlord and advise me that it is again being held by you.

 

Yours faithfully

 

I have taken the liberty of reducing the letter to simply the breach of trust.

 

You should be also writing to the landlord on the unjustified retention.

 

If you get no joy from either, then you can do a county court action for the deposit naming both agent and landlord on the claim.

[jec]

Firstly, may I suggest that you modify your post above and delete the specific references to the particular agent and the actual property.

 

 

 

I have taken the liberty of reducing the letter to simply the breach of trust.

 

You should be also writing to the landlord on the unjustified retention.

 

If you get no joy from either, then you can do a county court action for the deposit naming both agent and landlord on the claim.

 

Thanks Esio Trot

 

I have no valid address for the landlord as 4let have told my daughter he 'died' six months ago and the property is bieng managed by his three sons. I do have the family address of the 'deceased' landlord, but am unsure as to who to address it. I could just say something like c/o 18 anywhere street on the headder. but am unsure. 4let will not give anything away, they say they can't it is too contentious.

[Esio Trot]

Thanks Esio Trot

 

I have no valid address for the landlord as 4let have told my daughter he 'died' six months ago and the property is being managed by his three sons. I do have the family address of the 'deceased' landlord, but am unsure as to who to address it. I could just say something like c/o 18 anywhere street on the header. but am unsure. 4let will not give anything away, they say they can't it is too contentious.

 

It will cost you £3, but I would suggest you go onto the Land Registry site and get a copy of the title deed. This will tell you for sure who is the owner, and also the address they hold.

 

As you have now left, you are no longer a "tenant". Therefore, I understand that you cannot use the Landlord and Tenant Act to require the agent to give you the info within 21 days.

 

I'm pretty confident that you will have a valid claim against the agent anyway for breach of contract.

[jec]

Excellent advice Esio,

 

Cardiff trading standards have also agreed to formally investigate both parties. They are particularly interested as to how 4let deal with deposits and why there was no rent book and also why no receipts were given plus why all payments had to be in cash. I wish I had of known all this earlier but kids want to be so independent. They are fodder for these ripoff merchants.

 

I will send letter to family home address demand 14 days for money to be returned to letting agent. And address it to messers Rehman c/o 18 anywhere street.

 

Jec

[Ed999]

If it were quite literally true that a stakeholder cannot release a deposit without both parties' consent then it is open to either party to block its release; that would make it useless as a form of security for the landlord and unfair to a tenant not in default.

 

Clearly the first step an agent should take is to seek both parties' consent and if it is forthcoming there is no problem. I think it is a risky strategy to assume implied consent following no response to a "if we do not hear from you within x days we shall assume consent is given" letter. Seven days is certainly too short.

 

If one party refuses to give consent, then the agent needs to use his discretion. If the case is clear cut the agent can release the deposit. If there is doubt then the agent may retain the deposit until the matter is resolved. I do not think that this necessarily means that the agent can sit back and do nothing since his duty is to administer the deposit in accordance with the terms of the agreement and he must, so far as he is able to, conduct his own investigation. This will usually be easier for an agent who has actively managed throughout. There will of course be cases where the agent is unable to make a decision and I do not think the court would penalise an agent who had made a reasonable attempt to resolve the matter. It is in fact open to a stakeholder to apply to the court for directions as to how to deal with a deposit, but given the amounts usually involved that is rarely a practical option.

 

Disbursing a deposit without consent always involves a degree of risk, but if the agent is unwilling to accept such risk he should not hold deposits - though that is now academic for ASTs in view of the new arrangements.

 

 

I mentioned that the stakeholder's duty is to hold the stake money until the contract has been fully performed.

 

If there is a dispute as to whether that has happened, the stakeholder can still release the money. However, a prudent stakeholder will apply to the Court for directions in that situation, and will not be liable if he acts in accordance with those directions.

 

Alternatively, the stakeholder might pay the money into Court. This might in any case be what the Court directs, if the stakeholder was to apply for directions. If he retains the money, he should place it on deposit to earn interest while the matter remains unresolved.

 

Either party to the contract - i.e. either the landlord or the tenant - can also apply to the Court if the stakeholder does not do so.

 

The stakeholder has no duty to resolve the dispute, or to take any steps. He is only a stakeholder, the holder of the money, not an arbitrator.

[Ed999]

I do not think that is right. If an agent holds a deposit as stakeholder and either

 

(a) passes it to the landlord when he should not have done; or,

 

(b) declines to return it to the tenant when it should be paid to the tenant,

 

then the tenant may sue the agent. The whole point of a deposit being held as stakeholder is the protection that it gives to the person paying the deposit - the assumption of course being that the stakeholder is a professional person of integrity in whom the person paying the deposit may repose his trust. (I make no observation on the fact that The Estate Agents Act 1979 forbids estate agents from holding other than nominal deposits in property transactions.)

 

 

No, that is a misunderstanding.

 

Obviously the stakeholder is liable to the parties to the contract if he pays out the money to the wrong person, or pays it out before the contract has been fully performed. But that is not what I said.

 

I simply made the point that so long as the stakeholder is still holding the stake the tenant must sue the principal, i.e. the landlord, and not the agent. The stakeholder has done nothing wrong, so cannot be sued.

 

Where there is a dispute as to the terms of the contract, the tenant and landlord must sue one another, not the stakeholder, to resolve the dispute.

[Ed999]

Here is a letter I am bashing about with. It of course needs help. So any appreciated. Jec

 

I assumed that my deposits by law should have be held as stakeholder.

 

 

This is where your case breaks down, of course.

 

The deposit which you paid is only held by the intermediary "as stakeholder" if the contract terms expressly say so. Your assumptions are neither here nor there.

 

Unless there is an express term in the contract to that effect, the deposit is held by the third party as agent for the landlord, and can be immediately paid to him.

 

If the third party is anyone's agent, then he is certainly the landlord's agent, not the tenant's: so, as agent, he owes no duty to the tenant.

 

 

You can serve the writ, or address any correspondence to, the landlord at the address stated in the tenancy agreement; or at the property itself.

 

The family home address is the WRONG place to send a letter before action (or a writ/claim). You MUST address all legal proceedings in accordance with the terms of the letting agreement.

 

Write to the landlord, by name. Address the letter, or writ/claim, to the address for the landlord as stated in the tenancy agreement.

 

Or have the court bailiff serve the writ at the premises by nailing it to the front door. In a dispute relating to land, the Court will always accept the property itself as a valid address for service.

 

As a last resort, ask the court for an order for substituted service on the letting agents. But you may not get it in this case, because service at the premises is good service.

 

 

Not all land is registered at the Land Registry. A lot of properties are still unregistered. If the premises are registered there will be an address for service of proceedings on the registered owner. But BEWARE! The registered owner may not be the landlord with whom you had a letting contract.

 

It is not uncommon for there to be a sub-letting. You may have a contract with the head tenant, rather than with the freeholder. It will be the latter who is registered as the proprietor of the land.

 

 

It is no good at all corresponding with the letting agent, so don't name them in the letter before action. Address the letter to the landlord, even if you send it to the business premises of the letting agent (if that is the address for the landlord that's given in the tenancy agreement). As a matter of the law of agency, you have to sue the landlord not the agent.

 

The landlord is liable for all acts of his agent. But not vice versa.

 

 

I accept that the amount of money in dispute is too small to engage a solicitor, but you can always issue a small claim in the county court yourself.

 

I laughed (sorry!) when you said you had been told the landlord had died. The number of times I've heard that old chestnut! That's a standard lie, frequently told in these situations, equivalent to "the cheque is in the post" !

[Esio Trot]

This is where your case breaks down, of course.

 

The deposit which you paid is only held by the intermediary "as stakeholder" if the contract terms expressly say so. Your assumptions are neither here nor there.

 

Unless there is an express term in the contract to that effect, the deposit is held by the third party as agent for the landlord, and can be immediately paid to him.

 

Your comments above make statements that are quite specific. However, I must disagree with you. Unfortunately, I cannot find the case reference, but my firm understanding is that where an agent holds a deposit and the tenancy agreement is silent it is deemed to be held as stakeholder. May I ask you to provide evidence to the contrary if you believe you are correct?

 

 

It is no good at all corresponding with the letting agent, so don't name them in the letter before action.

 

The landlord is liable for all acts of his agent. But not vice versa.

 

Agreed - if they were acting as landlords agent. However, as I state in my earlier post, where a deposit is held as stakeholder it is different. The agent is not then acting under law of agency as they have set themselves up to act in a quasi-trustee position. Thus any agent in this situation wears two hats and must always consider if any action, or lack of action, is acting under agency or stakeholder. Many letting agents knowledge of their responsibilities in this area is poor or wrong in many cases.

 

The position of stakeholder for tenants deposits has come more to the fore since April 6th. This is because the mandatory tenancy deposit scheme require all deposits to be held as stakeholder and to be protected.

[jec]

OK I think that I am quite confused with the conflicting info you guys are giving. Who do I follow, the last three posts conflict. I intended to send the letting agents a prelim 14 day letter, as well as the landlord (the son who jointly owns the property and takes the monthy cash) at his home address. The problem with sending it to the address where my daughter rented is that he may never get it because other students now rent it. So what should I do please advise. I do not want to start getting this completely wrong.

 

Many thanks

Jec:confused:

[Ed999]

The position of stakeholder for tenants deposits has come more to the fore since April 6th. This is because the mandatory tenancy deposit scheme require all deposits to be held as stakeholder and to be protected.

 

 

Has it not occured to you that the reason why it was necessary for the government to introduce the tenancy deposit scheme was because the pre-existing law did not require the deposit to be held as stakeholder?

 

As I stated previously, unless the letting contract specifies that the deposit is to be held as stakeholder then it is held as agent for the landlord, and can immediately be passed to him.

 

For instance, in Ryan v Pilkington [1959] 1 WLR 403 it was held to be within the implied authority of an agent to receive a deposit as "agent for the vendor", instead of as "stakeholder".

 

The old law will be of less importance in future, now that the tenancy deposit scheme is in force under the 2004 Act.

[Esio Trot]

Has it not occurred to you that the reason why it was necessary for the government to introduce the tenancy deposit scheme was because the pre-existing law did not require the deposit to be held as stakeholder?

 

This may have been an additional reason, but the main reason, however misguided, was that a significant number of tenants were unhappy with deductions and non-return of deposits.

 

As I stated previously, unless the letting contract specifies that the deposit is to be held as stakeholder then it is held as agent for the landlord, and can immediately be passed to him.

This is the essence of our differing opinions. My understanding is unless the letting contract specifies that the deposit is to be held as agent for the landlord, then it is held as stakeholder.

 

For instance, in Ryan v Pilkington [1959] 1 WLR 403 it was held to be within the implied authority of an agent to receive a deposit as "agent for the vendor", instead of as "stakeholder".

I don't think you can use this case to support your view. The estate agent had signed the receipt for the deposit "as agent for [the vendor]" the court case was the the vendor trying, and failing, to establish the the estate agent had no authority to receive any deposit otherwise than as stakeholder.

 

I still maintain, and although I have only had dealings in the county court which does not set a precedent, no judge has ever queried the matter of stakeholder in a silent agreement.

[Esio Trot]

OK I think that I am quite confused with the conflicting info you guys are giving. Who do I follow ...

 

That is the risk of using a public forum.

 

I can only suggest that you read through all the posts on this thread again, and also visit the links. At the end of the day you will have to make the decision.

 

There is an excellent article on Landlordzone that goes into deposit status. It does state that there are two schools of thought. You are getting both here. The link is http://www.landlordzone.co.uk/pdf/DepositsPaulFarndonMarch2007.pdf

 

You might also want to search the forums of the above site as well.

 

One thing to bear in mind is whether it is better to send out your letters to one or both agent or landlord. If you leave out either, you are limiting your options. Sending to both keeps your options open and gives you time to consider further moves.

 

I advise you to write to the agent as suggested and also the landlord at the address for service in your tenancy agreement. No need to do recorded - just get a certificate of posting from the post office.

[jec]

Esio,

Thanks.

 

Husband phoning both today personally. To ensure that we have atleast tried numerous times to resolve situation (incase we need to file in county court). Next step letters to both. Then county court. I know the process well enough having sued natwest and retrieving over 5k in charges. It is the law here that I am ignorant.

 

Jec

[Aequitas]

I was going to say that who holds the deposit and in what capacity is irrelevant and repeat my advice to sue 4let.co.uk on the basis that the contract is with them. However, out of curiosity, I did a search at Companies House and find that 4let.co.uk was dissolved on 04/09/2007. Clearly no point taking action against the company.

 

Where this leaves you I am not sure. Since as a matter of law the deposit always was your daughter's it ought not to have been distributed as part of the company's assets, assuming the company continued to hold it. Trying to trace the money is going to be difficult and you need to consider whether, having regard to the amount outstanding, it is worth pursuing.

 

I can only suggest that you contact the owner of the property and the University's accommodation service to see if they have any issues with the company and consider where you go from there according to what you learn.

[Esio Trot]

... However, out of curiosity, I did a search at Companies House and find that 4let.co.uk was dissolved on 04/09/2007. Clearly no point taking action against the company.

 

What a bummer

 

I note though that a new company with a similar name has been formed. I bet that the officers are one and the same!

 

Name & Registered Office:

4LET LIMITED

16 CHURCHILL WAY

CARDIFF

SOUTH GLAMORGAN

CF10 2DX

Company No. 06352993

 

Status: Active

Date of Incorporation: 28/08/2007

[jec]

Daughter just been in to see 4let this morning at their Miskin Street address to get copy of contract they say they are still in business and were confused about the closing down thing.I note they answer the phone as 4let and still have properties for let in office window.Receptionist not sure what this is about. The insist they are still trading. However companies house does correctly show them as disloved. The other 4let ltd is in another part of the city.

[Ed999]

I still maintain, and although I have only had dealings in the county court which does not set a precedent, no judge has ever queried the matter of stakeholder in a silent agreement.

 

You can't say that. It falls a *long* way short of citing an authority in support of your opinion.

 

 

One thing to bear in mind is whether it is better to send out your letters to one or both agent or landlord. If you leave out either, you are limiting your options. Sending to both keeps your options open and gives you time to consider further moves.

 

This is certainly a sensible approach. But I do suggest sending all correspondence by recorded delivery.

 

I note that landlordzone.co.uk supports me on one point: "Courts usually dismiss claims by the tenant against the landlord’s agent as they are acting with the landlord’s authority as his agent."

 

That being the case, I repeat my opinion that the tenant can only sue the landlord, not his agent. A contract of agency does not make the agent liable for the acts of the principal.

 

A stakeholder might be sued, if the tenant can prove that the person in question is a stakeholder. But if the tenancy agreement is silent on the point then the tenant will face difficulties in proving that.

 

The sensible course of action is to sue the landlord.

 

 

If the agent company is now in liquidation, a claim against a company in liquidation survives, against the liquidator. You should write to the liquidator instead of the company, but everything else remains the same. If you have rights against the company they can still be enforced. Companies House will tell you the name and address of the liquidator.

 

A members voluntary winding-up is not possible unless the company is solvent (a declaration of solvency must be made by a director under s.89 of the Insolvency Act 1986), so a winding-up is not an automatic indication that there is no money in the company.

 

However, if it is an insolvent winding-up then obviously there will be no money. A prosecution might be possible against a company director personally, for fraudulent trading, if a company continued trading when it was already insolvent.

 

Chapter X of the Insolvency Act contains a lengthy list of offences commited during an insolvent winding-up, including in respect of fraudulent trading (s.213) and wrongful trading (s.214).

 

Setting up a new company with a similar name and the same directors is an old trick, and (if true) should be reported to Trading Standards. There is a restriction on the re-use of company names after an insolvent liquidation, in s.216 of the Insolvency Act.

 

There are also powers to disqualify directors who have been a director of two or more companies which have gone into insolvent liquidation within a prescribed period.

 

In the light of the denial that the company has been wound-up, the first step you must take is to determin whether the directors of the old company have in fact formed the new company. Are the directors of both substantially the same?

[patrickq1]

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