More than £1 million of tenants' deposits have been stolen by rogue letting agents so far this year, an anti-deposit campaigner has warned as he claims that otherwise honest firms could be unwittingly breaking the law.
More than £1 million of tenants’ deposits have been stolen by rogue letting agents so far this year, an anti-deposit campaigner has warned as he claims that otherwise honest firms could be unwittingly breaking the law.
Ajay Jagota says the total of £1,018,100 is equivalent to 1,000 renters being ripped off £1,100 – the average UK rental deposit – and at least one landlord or letting agent is convicted every single month.
He claims at least 14 letting agents have been convicted of thefts ranging from £500 to £400,000 in 2016, with the latest case coming to court last week and involving almost £160,000 at an agency in Devon.
Jagota, who runs North East letting agent Keep It Simple and deposit-free renting solution Dlighted, believes the problem is ‘plain and simple’ and said: “If landlords and letting agents didn’t take cash deposits these thefts would be avoidable.”
He warned that these figures might only be ‘the tip of the iceberg’ as two-thirds of the industry use an insurance-based deposit scheme which makes them the custodians of £2.4 billion of the £3.5 billion held in tenancy deposits.
Using the example of an agency which lets 100 properties and charges the average UK deposit of £1,100, he said the company’s client account should have £110,000 in it.
“Assuming tenant turnover of around 10 per cent a month, only £11,000 will ever be called upon to pay out and as the account is always being replenished it is easy for money to go ‘missing’ and for tracks to be covered,” he said.
Mr Jagota predicted there will be ‘otherwise upstanding and honest agents’ who misappropriate client money in the mistaken belief it is ‘completely legitimate’ to do so – despite the clear rule that deposit money must be placed in a ‘completely ring-fenced account and not touched by the agent or landlord.’
He said there were no checks and balances to prevent this and warned that some agencies risked insolvency if they habitually used deposit money in their day to day activities.
He is now calling for the BTL industry to ‘evolve’ past cash deposits and move to a theft-proof insurance model of asset protection ‘as many other sectors have done.’
Here at Belvoir Liverpool Central all of our deposits are registered with The TDS (The Dispute Service) and are all protected by this scheme. If you are a landlord looking to rent out a property or a tenant looking to rent please do not hesitate to contact us on 0151 231 1613 or firstname.lastname@example.org