Here is a question to the blog clinic from Sue who is a landlord
I recently moved management my rented properties to a new agent because of a poor level of service. One of them was in the middle of an active tenancy and the previous agent was holding some rent and the deposit (it was protected – one of the few things they managed to do correctly).
When I gave the agent notice that I was moving my properties, they unprotected the deposit and rather than forward it to the new managing agent, they returned it (along with the non forwarded rent) back to the tenants.
The new agent has contacted the tenants and although have agreed to repay the rent, they will not repay their deposit unless we prove that they have to.
Is there any way we can make the tenants repay?
I expect the agents refunded the deposit money to the tenants because they feared that they might be at risk (being the people the deposit was initial paid to) if the new agents failed to protect it.
The only way I can think of, to get the tenants to pay the deposit, is to serve a section 21 notice and say that their tenancy will not be allowed to continue unless they pay the deposit money back to your new agents.
However if they were going to leave anyway at the end of the term, this will not help you.
If you suffer any financial loss through not having a deposit you may have a claim against your old agents as it is their fault that you do not have a deposit.