Failing to safeguard deposits

An Exeter lettings agent has been disqualified for 6 years after failing to safeguard more then £68,000 in tenancy deposits.

The agency operated a custodial deposit scheme in accordance with the Housing Act 2004 and held the deposits on behalf of their landlords. However, from around June 2016 to April 2019 the agency failed to comply with its statutory duty and properly safeguard the deposits.

It is understood that the manager of the agency used the deposits for at least 54 properties to cover costs associated with the general running of the company as opposed to paying them into the government backed custodial deposit scheme. This breach only came to light when the agency entered into liquidation and the Insolvency Service conducted an investigation into the agency’s activities.

On 24 December 2019, the Secretary of State accepted a disqualification undertaking from the agency manager after she admitted that the deposits had been inappropriately utilised. This undertaking means that from 14 January 2020 the manager is banned for 6 years from acting as a director or directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.

 

Disclaimer

The contents of this blog post is not legal advice and is provided for general information purposes only. If legal advice is needed readers should contact a solicitor. No responsibility for any information contained within this post is accepted and PainSmith solicitors accepts no liability in respect of the contents or for action taken based on this post.

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