£926k worth of tenancy deposits stolen in 2017 | Discuss

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£926k worth of tenancy deposits stolen in 2017
02/01/2018
2:41 pm
News @ Tenant Referencing
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Fresh analysis from the industry reveals that rogue letting agents were convicted of stealing just over £926,000 worth of tenancy deposits last year.

Deposit-free renting firm Dlighted, who keep a running total of the cash value of deposits criminal letting agents have been convicted of stealing, reports that by the of the final quarter of 2017 overall thefts totalled £926,037 – an average theft of £38,585 per conviction.

At least 25 rogue letting agents and buy-to-let landlords have been convicted of offences relating to the theft of deposits ranging from £130,000 to £595 throughout the year.

Herein lies the problem more and more UK landlords are facing.

Landlords primarily want a foolproof way of finding and keeping tenants, but the deposit system (as it stands) can present a minefield of hassle and hazards for landlords.

So as the amount of private landlords deciding to ditch taking deposits increases and the pay squeeze intensifies coupled with wage growth falling further behind inflation, more and more tenants are asking: Is it possible to protect against the loss of my deposit from charges for accidental damages caused to the landlord’s property?

As Mydeposits quite rightly point out, a deposit acts as a security blanket for the landlord against any breaches of the tenancy agreement. However, if a tenant has an accident in the property or (heaven forbid !) their deposit is stolen by the agent, more often than not, they will have no way of paying for repairs from extra income or savings. The tenant can then lose their deposit and this means the tenant is caught not being able to move home, unless they save up an entirely new deposit.
In this situation, a landlord may be left with a tenant who has lost their deposit and who also has an additional repair bill. If a tenant cannot meet the damages bill it will immediately put both parties into a difficult position as the tenant may feel frustrated and trapped. This scenario becomes known as the “stalemate impasse” – a position to which neither party can move without great financial pains, becoming almost impossible to agree on an amicable way out and often ends up in a courtroom; inevitably costing the landlord and the tenant dearly.

The Cure?…

Since Rent Safe UK introduced their specialist Tenant Contents Insurance landlords and tenants are actively recognising the benefits, where the weight of the consequences outweigh any form of cost.

For a very small monthly amount (which can be set up via direct debit), a tenant can protect their deposit and the rental property with a simple click of a button (click to get a quote now).

Landlords and Agents that use the Tenant Referencing UK application form can now nominate their tenant(s) for a contents insurance quote, to ensure that they’re protected from the outset.

Got something to say? Please leave a comment below!

08/01/2018
12:47 pm
sandringham
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not that i’m saying this practice is right (because it’s not) but doesn’t this prove that letting agents are struggling as well as landlords, if they have to resort to this?

01/02/2018
8:36 pm
moyeni
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Rogue letting agents flourish in a non regulated industry. There is no legislation ensuring deposits or rentals are kept in a separate and insured bank account and no legislation ensuring agents must be accredited to any property authority. Under UK law agents are seen as operating under the instruction of the landlord – whether the action has been sanctioned by the landlord or not. In other words the landlord is always held responsible. 

The industry is a magnet for fraudsters and many of them have embezzled money, closed business to evade the law and simply re-opened under a new company name.

02/02/2018
7:01 am
PaulBarrett
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All custodial schemes should be banned.

All LL should be forced to use the insured schemes and hold the deposit monies themselves.

A LL  who runs of with deposit monies is rare indeed!

Don’t see many properties disappearing

02/02/2018
10:03 am
moyeni
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I agree with you entirely.

A stolen deposit results in untenable and potential ruin for a landlord if the agency embezzles the funds. It is almost impossible to evict a tenant who claims the unsecured deposit as a defence – and the punitive fine for not securing it is 4x the amount to the unwary landlord. I doubt any landlord would willingly place themselves in that predicament. Financing the cost of an eviction process, which could take up to a year to enforce whilst the tenant withholds rental, has bought many a landlord to financial ruin.  

 It is the law that needs changing. 

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