Using tenant deposits

Over the years, I have received a number of complaints about agents, often instructed on a tenant find only basis, who have not forwarded the tenant’s deposit to the landlord, as they have advised they will do in their Terms of Business, to allow the deposit to be protected in a tenancy deposit scheme. Instead, the agent has retained the tenant’s deposit and used it to offset the fees due to them from their landlord client, considering this to be perfectly acceptable and no more than a ‘paper exercise’ to ensure payment of their fees. I have always criticised the agent for such action. So concerned have I been by this practice, that the 1st August 2014 version of the TPO Code of Practice for lettings agents has been amended to incorporate an agent’s obligations in this regard. Paragraph 11k of the Code specifically emphasises that deposits belong to the tenant and states that where it is passed to the landlord for protection in a tenancy deposit scheme, any charges due from a landlord for fees etc must be dealt with as a separate issue and not deducted from the funds passed to the landlord. Put simply, the deposit monies…