Q&A - Letting Agent went bust and tenant's rent and deposit have disappeared

Q: I own an investment property, and for many years I've had a letting company managing the tenancy for me as agents.  The tenant has been living at the property since 2010 and all rent and deposit money has been paid through the agent. I haven't received any rent for the last 3 months and when I checked, I discovered that the agent had gone into liquidation. I've spoken with the tenant directly and he has given me proof of payment of the rent up to date. He also commented that he hadn't received confirmation from the agent that his deposit had been secured. I don't know what the company did with the deposit money. Who is responsible for repaying the deposit to the tenant when he leaves?

A:  It is your responsibility to secure and return the deposit to the tenant, as the contract is between you, as landlord, and the tenant.  The letting company received the money on your behalf as agents and they should have either secured the deposit in a government approved scheme within the prescribed time limit, or passed the deposit money on to you for you to secure the same.  If the liquidator of the company is unable to assist you, then you should contact the various schemes directly to see whether the deposit monies have been registered with them.  If the deposit has not been secured, then you must take steps to replace the deposit monies and have it secured in a scheme.  If this is not done, the tenant could issue proceedings against you for recovery of the deposit, which could include a penalty of up to three times the amount of the deposit. You should consult a solicitor regarding recovery of the rental payments and deposit from the letting company.