How can you recover the part of a deposit which was not protected?

This post is more than 13 years old

January 30, 2012 by Tessa Shepperson

This is a question for the blog clinic from Richard who is a tenant

We rented out a flat in May 2010, to secure the flat we placed a holding deposit of £750 with the letting agent. On signing the lease we paid another £1328 to bring the deposit up to 6 weeks rent (£1500pcm, silly times)

The letting agent only deposited the £1328 with the DPS, and unfortunately at the time we did not notice (as we were moving house).

The original letting agent has since gone out of business, the new agent claims to only know of the original amount deposited with the DPS, and as such we are struggling to recoup that money.

Do we have to try and claim the money back from the administrators of the first agent?

Is it the landlords ultimate responsibility to ensure that the correct amount as been deposited with the DPS? and as such should we be trying to contact him for the return of the £750?

I read somewhere that if the deposit has been incorrectly lodged the landlord is liable for 3 times the amount in fines? I dont really care about that I just want what we deposited in the first place.

I hope you can help as I feel that I am running against a brick wall speaking to the new letting agent.

Richard, I would suggest you forget about bringing any claim against the agents. The first agent has gone bust, and realistically when this happens, only the Inland Revenue and secured creditors have any chance of a payout. The other agent was not involved with the first payment and so cannot be held responsible.

However the landlord will be liable for the full amount of the deposit. Even though the money was paid to the agent. I know this seems unfair on the landlord, but thats the way it is. Under agency law, principal is liable for the acts of his agent (well most of them).

You will need to be able to prove that the money was paid. I assume you have a written receipt. Write to the landlord enclosing a copy of this (DON’T send the original!) and ask for reimbursement.

You won’t be entitled to the 3x the deposit award I am afraid (you can read why here) but you are entitled to the return of your deposit.

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