Letting Agent Or Landlord Responsible For Securing Deposit Into A Tenancy Deposit Protection Scheme?

16 Jul 2009

Is it the Landlord’s responsibility to put the security deposit into a Tenancy Deposit Protection Scheme, or the Letting Agents?

For those Landlords out there that are using Letting Agents, are you certain that your agent has deposited your tenant’s deposit into a legally required tenancy protection scheme? What happens if your agent receives the deposit, fails to put the deposit into a scheme, and you find yourself in the middle of a legal debacle because your tenant has clocked on that the deposit isn’t protected? Whose responsible then? You, as the Landlord, or your letting agent? The answer actually…THE LANDLORD! The Landlord is ALWAYS responsible. However, tenancy deposits are covered in Part 6 of the Housing Act 2004. (212 – 215) and it clear that the rules do not just apply to Landlords but also to anyone acting on their behalf:

References to a landlord or landlords in relation to any shorthold tenancy or tenancies include references to a person or persons acting on his or their behalf in relation to the tenancy or tenancies (Section 212(9))

While it is ultimately the Landlord’s responsbility to ensure that the deposit is secured, the responsbility of actually securing the deposit can fall onto the letting agent.

If the contract (by contract I mean the Agent’s Terms & Conditions, NOT the Tenancy Agreement) does not task the Agent with protecting the deposit, he should pass it straight to the Landlord. If the agent does not pass over the deposit promptly, the landlord is still responsible for protecting the deposit within 14 days of the agent having received it.

If the contract between the Landlord and Letting Agent states that the Agent is responsible for protecting the deposit on the landlord’s behalf, then the agent would potentially be liable to prosecution if he fails to do so; but by the Landlord rather than the tenant.

However, tenants should always pursue the Landlord if a deposit has not been protected – if the Landlord thinks that the deposit should have been protected by the Agent they may have a separate case against them but that does not take away from the Landlord’s responsibility. The Landlord should ALWAYS check that the deposit is protected, even if it isn’t their responsibility to protect the deposit.

So, it can actually end up in a there-way brawl. The tenant will chase the Landlord, and the Landlord will chase the letting agent. Hey, maybe that’s how you like it…

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