Landlord Wont Give Back Bond

[Esio Trot]

No, with the landlord.

 

Not necessarily.

 

MrShed and I have tossed this matter about in other threads and forums - and I contend that the above may not be the only avenue.

 

Bit more info if it helps. As I said she let thru 4let.co.uk Cardiff. But half way thru the last year, Rehman the landlord ceased using them and took the money himself in cash each month and refused to issue receipts. The kids did not sign a new contract. 4let did not inform them of any change to the contract

 

No new contract was signed, so the original one is the only legal base to work from. The first point to establish is whether the deposit was held by the agent as Stakeholder or Landlords Agent, if the former, then 4let should be named on any legal action.

 

Although 4let are "agents" for the landlord and the landlord is ultimately the person responsible in all other aspects of a tenancy, this does not override the duty of care that holding deposits as Stakeholder entails.

 

The TDS website has a definition of Stakeholder:

 

A “Stakeholder” is a person or firm who holds the deposit as a quasi-trustee on behalf of both parties [this may vary in Scotland] and who cannot release it without the consent of both parties.

 

ARLA also state that money being held as Stakeholder is a quasi-trustee position on behalf of both parties

 

Many agents do not realise that if the TA is silent on how the deposit is held, the assumption in law is that it is Stakeholder.

 

JEC's daughter needs to carefully read the contract she signed before embarking on a dedicated course of action.

[Esio Trot]

Originally Posted by TDS-FAQ's

A “Stakeholder” is a person or firm who holds the deposit as a quasi-trustee on behalf of both parties [this may vary in Scotland] and who cannot release it without the consent of both parties.

 

I do not think the words in red are correct.

 

I take the opposite view and would contend that because of the quasi-trustee status of stakeholder deposits, consent on both sides is needed. It does not need to be express consent though.

 

We keep the deposits for many our our let-only landlords. When the tenant vacates they sometimes do not authorise us to return deposits. In this case we write to them stating that unless we hear from them within 7 days, the deposit will be refunded to the tenant (if we hear nothing then we have implied consent).

 

Another example is that five years ago our agency was sued by a tenant for non-return of a deposit of £1400 (it was a let-only but we held the deposit). The landlord argued that rent exceeding this amount was owed; the tenant stated that rent was fully paid. Neither would provide us with evidence. The case was dismissed at the hearing as the amount was disputed and we had no evidence from either party. To this day neither party has retracted their claim and we still have no evidence from either party and the money remains in our account.

[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.

[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.

[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.

[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.

[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