A letting agent who failed to protect tenants’ deposits and did not pass rent on to landlords has been jailed. The out-of-pocket victims have been warned they are unlikely to get a penny of their money back.
Paul Collins, 47, who ran Thomas and Company Rentals in Milton Keynes, was sentenced to ten months in prison after pleading guilty to 25 counts of fraud.
The case was brought after Milton Keynes Council’s Trading Standards received complaints from landlords that they had stopped receiving payments.
Passing sentence, Mr Recorder Laird QC said: “On occasion you met landlords yourself and face to face. With barefaced cheek, you lied to them saying that the business was sound when it wasn’t. The losses were around £110,000.”
He added: “Deposits paid by tenants were not protected in the appropriate way. You told the authorities that you were aware of the legislation that required the protection of deposit monies.
“You were eventually made bankrupt, and there is little prospect of these people receiving any recompense for their losses. These were offences of a serious nature.
“The money was never the property of Thomas and Company Rentals. It was others’ money.”
Karen Ford, head of the Regulatory Unit for Milton Keynes Council, said: “The sentence imposed reflects the seriousness with which the court views those who defraud businesses and consumers.
“Trading Standards will always look to take action to protect the rights of the consumer and support legitimate traders in Milton Keynes.”
The firm was not a member of ARLA or NALS. As the law stands, there will be nothing to stop Collins returning to the lettings industry as there are no powers to ban letting agents.
This is how we ran the story in June 2011:
http://www.landlordtoday.co.uk/news_features/Furious-landlords-pile-on-to-Facebook-after-letting-agent-shuts
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Comments
Compare and contrast the sentances
http://www.bbc.co.uk/news/uk-england-devon-21964552
10 months versus 6 years.
It won't be long before another similar story breaks and the next agent is jailed for spending the landlord and tenants money.
I give it three months.
@Peakie Boy on 2013-03-28 16:40:08
Very good points.
There is a world of difference between being out of ones depth and deliberately being fraudulent. The latter should bring about draconian punishment - the former less so. That is what judges are responsible for deciding.
There for the grace of god go many older letting agents. I personally know this guy and whilst I do not defend his actions - he fell fate to a boom market and vastly increased competition and ever changing legislation that he did not keep pace with - to sum up he was out of his league - they were the No 1 letting agent in MK doing 50 + lets per month - this dropped fast with increased competition and he failed to keep pace.
Whilst Paul deserves what he got - some of their landlords have themselves to blame too - who allows non rent payments to run for 2 years? We have taken some of their landlords and we know 3 of them that did not receive rent for between 12 to 24 months before they took action.
10 months?
Ten years in prison with out a half time let out would stop him working in the industry. Actually, it is a trading business at best but never mind.
Alternately, put him in a debtors prison and that is where he stays until all monies are refunded. Old fashioned debtors prisons were so dreaded that no one in their right mind risked such a fate. When you could not pay your debts that is where you went. The rights and wrongs of how you got there were not an issue. If you ended up there you had suffered something beyond your control or you were just mad and/or incompetent.
Using debtors prisons would obviate the need of a vast trade association and the rest of the landlords and agents could just get on with their lives. Has any one worked out what the proposed army of regulators is going to ultimately cost tenants? Don't forget that landlords will rapidly sell up when property letting ceases to be worthwhile. Who will pay the regulators then?
I can't quite match 20 years experience providing training so if you are willing to accept 19, I will agree and disagree.
From the other stories regarding regulation, that essentially boil down to failed governance of the industry, there is not a single governing body with a single set rules for the whole industry to follow. There are general principles common to most but nothing definitive. How do you expect the 50% you consider as not knowing what they are doing and out of their depth to do something different if they in fact think they are right and are being told they are right?
With your training experience you will understand the benefit of consistency and reinforcement, however with 40+ SAAS providers and a plethora of industry trainers all delivering individual interpretations of an un-specified syllabus, consistency is simply absent and reinforcement impossible.
Governance needs to start at the top with a single set of rules and standard operating procedures and then the industry can move forward.
@Industry Observer on 2013-03-28 11:14:34
Sorry, we must agree to differ (again!). Businesses should never ASK for this kind of government legislation, it would be just another layer of unenforceable regulations. A crook is a crook and would easily get around your well meaning proposal. Severe punishment within current laws is needed which would soon become a deterrent to the majority of others.
@ Robert May
Andrew might be a bit harsh in his figure and I don't doubt the hard working as you have to work hard to be dishonest and keep up the pretence of honesty. Same with incompetence and convincing people you know what you are doing.
Unlike many who post on here and only know of their own experiences and of local competitors - and I don't knock that for one moment you can only judge as you find - I've been in the industry 20+ years training and supporting agents and Landlords.
I can assure you that probably 50% of agents don't really know what they are doing and are soon out of their depth. The figure for Landlords is probably a fair bit higher.
Most are well meaning and intentioned and certainly honest, but in terms of competence the situation in the industry, professional and amateur, is really not that good
Morning SfL I assume you will agree with this comment?
@Ray Evans
Regulation and licensing would stop this sort of thing provided:-
1. It was set up correctly, amply funded and above all amply staffed
2. All regulated agents (and Landlords) had snap visits unannounced at least twice a year and ideally quarterly
3. No numbers would not be a problem as I reckon most private landlords would end up using an agent and 75% of current agents would cease business - or at least legal business
4. It was expensive - fees should be high and costs of maintaining licence should be high as well.
5. The penalties were serious - loss of licence means loss of business
and I could go on but won't because as usual the solution is simple but the will to implement is not there.
Witnesss the witless press release today yet again on the subject by ARLA - a regulator to regulate the regulators, Lord give me strength.
Same with deposits.
As of Monday there will be 4 authorised providers with at the last copunt probably 7 schemes between them.
What a load of nonsense when all that is needed is one properly organised, staffed and funded scheme, Custodial with statutorily controlled fee levels (if any)
should read 0.2% (not .25)
@ Andrew are you really suggesting that only 25% of the industry are honest and hard working?
Despite your claim that this is a 'regular occurance' it is not. Of 3,600,000 tenanices the industry attracted less than 8000 complaints to OFT, TPO and Shelter in a 12 month period and not all of those 0.25 of complaints were upheld.
I am not defending or condoning Paul Collins but addressing your erroneous posts which simply pour fuel on and reinforce misconceived stereotypes.
Some people are putting a lot of work into identifying the likes of Paul Collins and identifying them long before the make off with a single penny, however there is a problem that even when a criminal is identified early the police consider the matter as a civil case until after the fraud is committed by which time it it too late.
http://www.thomasandcompanyrentals.co.uk/ContactUs.aspx
This is the bit that apparently beggars all reason and justice. Going to jail has not shut the doors of his business.
Does that seem right or are there two Thomas & Co's in Milton Keynes?
Andrew, fair point. Bankruptcy will make it difficult but not impossible if he's determined enough.
Before they start.
No 'regulation'/''licensing' would stop this sort of thing as it only works if rules are complied with. Crooks do not comply! A crook is a crook is a crook. Deliberate criminal actions should be met with real punishment under the current law, it is the best deterrent.
Bankrupt or not, it does not stop him from working in the industry.
I doubt that a little technicality like that would stop someone.
The simple moral argument of "Its not your money" did not work, so bankruptcy is not a hurdle.
A business does not have to be directly in your name.
Stories like this hurt the whole industry - Letting / Sales / Surveying / everything.
Whilst I share the view that 10 months isn't much for a theft of £110k its worth noting that he has also been made bankrupt, so he won't be off on a cruise and starting up all over again.
In answer to Rajinder, if you used a Property Ombudsman member then the company's formal complaints process followed by referral to the Ombudsman is your route for redress. If not, maybe Trading Standards if you really believe they've breached their terms and conditions.
if you chose the cheapest agent you could find you're probably up the creek without a paddle - agents are often very cheap for a reason.
'The sentence imposed reflects the seriousness with which the court views those who defraud businesses and consumers.'
Really ?
£ 110,000 tax free income and in return he gets 10 months free board and lodging (and to tie in within another story today - no council tax as Her Majesty will be paying it)
Thats more income than I get for 10 months ! :-)
Hi,
I have four properties in the Wigan area and appointed a letting Agent five years ago. He promised to get me a rent of £425 a month but the maximum he could get was £350. Some properties became vacant and he was least concerned to get them rented and let me suffer Void period for two months. When I finally decided to take the portfoloio off from him, then he asks for four weeks' notice in which my property would remain empty for nothing. Whereas in the terms, he stated that if my property is not let within three weeks, I can take the property back without any penalty, which is around £200. So, this Agent took vengence on me and found me a very bad tenant at £325 a month and passed on to the next letting agent, who did not give me full information about this new tenant but shoved her in against my full approval. In fact, packs of lies were told to me and now I am shifting a New Letting Agent who have a Branch in Reading as well and they are Indians as I am.
Now, this second letting agent is messing with my rent payments and misses monthly payments on one excuse or the other. After take over by this new Indian Letting Agent, how could I take action against these crook agents please? Shall I apply to the Trading Standards or someone else? First one is a member of letting agents whilst the second one is of none.
I will add that I feel sorry for the hard working and honest ones.
That should make 25 % of you feel better.
Hurt feelings? - Well it is just the way others see it.
Up to you guys as this is a regular feature.
Probably will do 5 months in HMP Holiday Camp! Not a bad break for £110 K.
Then a quick cruise and set up in business again.
I am not a letting agent or a dishonest man, but if I was then I know which profession that I would go into.