A creditors’ meeting is to be held on Thursday for landlords and tenants of The Property Showroom which was highlighted by LAT last week after apparently shutting down suddenly.
Ayrton Properties, trading as The Property Showroom in Leeds, is run by husband and wife team Mark and Samantha Hamilton-Smith.
The firm has appointed liquidators Leonard Curtis Recovery of Bury, Lancashire.
It is thought some tenants’ deposits and rental money could be at risk. The firm is thought to have managed some 80 properties. Details will be spelled out at the creditors’ meeting.
The firm’s website displays both the OFT and Ombudsman logos, but does not appear to have been a member of a regulatory body such as ARLA or NALS, meaning that it may not have had client money protection.
The affair is likely to boost calls for the compulsory regulation of lettings agents, amid suggestions from sources close to the Government that if the pressure is kept up, then housing minister Grant Shapps will relent on previous refusals.
There are also calls for it to be made mandatory to make it clear what the Ombudsman logo actually means as far as consumers are concerned.
Eric Walker, of London agents Bushells, believes there should be an obligatory ‘Your money is at risk’ warning displayed with it.
He suggests that a suitable disclaimer could read: “TPOS offers a redress scheme only and does not offer any financial protection in the event an agent ceases trading. Client Money Protection is only available through regulated members of NALS, ARLA, NAEA, RICS or Law Society. Your money is at risk if you use a non-regulated agent.”
Any landlord or tenant, or other possible creditor of Ayrton Properties, trading as The Property Showroom, is advised to get in touch urgently with Leonard Curtis Recovery on 0161 767 1250.
The first story, which also appeared on a sister site, Landlord Today, resulted in other agents being named as having closed down, with clients’ money having disappeared.
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Comments
I recognize with London, uk Broker. I like EW's concept, but its a bit lengthy and will probably be made so little it cant be study.
Simply, in the lack of compulsory control, a representative should reveal on their web page and conditions of business under the primary conditions "ABC Lettings do NOT have Customers Money Security Insurance and have not registered a non-reflex regulating body"
Letting agents in Leeds
@Blame the software. As you have seen fit to troll me I might as well accept your kind invitation to comment.
If Balham EA is using focused design "client cash" accounting software then he will be using the wrong software for his circumstance.
If he is using "nominal ledger" software adapted to do client cash accounting then he will be using a good compromise solution for his particular business.
I take it BTS that you know the subtle difference between the two? My guess is you don’t and often nor do people who buy such software. Adapted nominal ledger software gets bought because it appears to work like Sage and Quickbooks etc by book keepers used to using such programs or on the advice of the company accountant. In the hands of trained and qualified book keepers there isn’t usually a problem but for those not experienced in full blown nominal ledger accounting , such systems are both daunting and complicated to follow and reconcile.
There are good reasons why most companies use accountants to keep their own company’s books in order, why don’t those reasons apply to their care of their clients’ money?
No sensible agent I know lets their letting negotiator anywhere their own company books so how come, in some cases, these boys and girls are suddenly fit and qualified to handle client’s cash which by definition is roughly 10 times as much as company turnover and roughly 20 times when deposits are considered?
This is for real, the Balham bit is there to keep you off the scent but he still within 2 miles of the South Circular.
He looks like an Agent, acts like an agent and who can tell other than he is working to a legitimate set of rules that are different to a regulated agent.
Compulsory regulation needs to encompass "agents" like this.
You may all remember a little spoof video a while back which featured a Balham Estate Agent.
If you haven't already worked it out, this guy is taking the michael.
Should this really have been done on a discussion about a very serious topic within the industry ...no!
Robert May! There is a name from the past! he didn't approve of the Ferrari (deposited as it were) outside the office and just laughed at me asking how I could invoice the landlords to pay for his software, they were after all said and done the ones who would get the benefit.
Good to see Ray C know his stuff! Tell em Ray, you and me together mate!
Sounds like Balham EA - if he is a genuine poster at all - is offering a sub letting service where his company is the tenant; he rents the property then sublets it to the actual tenant.
In that scenario the rent the tenant pays actually is his not the landlords, as the rent he contractually pays to the landlord covers his liability.
The fact that he didn't seem to understand the difference between that and the standard context of rent collection that the thread was discussing speaks volumes.
And if all his landlords have informed their mortgage lenders that they are subletting (have they?), and the lenders have agreed to it (unlikely) then he won't be doing anything wrong at all.
All we need now is Robert May to tell us that Balham EA is not doing anything wrong, its just the software he is using!
BalhamEA - . Rent guarantee - in principle - not insurance based. So your guarantee is your word and your juggling one persons rent to pay the landlord of another property.
You say 'when things are tight, you delay things" - have you no shame?
Is Balham EA for real?
Balham EA's attitude is the sort that gives our industry a bad name. As Headway correctly pointed out, its not your money, whatever your terms of business might say.
The clue is in the name CLIENT money.
I do rent guarentee so it is MY money I am my own client the people what own the properties get a fixed amount each month whether they are empty or full.
As I said there are no deposits so you think about, it the client account should be zero if I have paid all the money to the landlords.
I'm not breaking any law or ethics, you educate me if I am ignorant, which bit of the housing act am I breaking? you might find that by not having deposits it is you who is the ignorant one.
I don't owe anyone anything and no-one complains so don't think you are better or smarter than me.
Thanks for the pointer about the epetition. That's 11 signatures now Mike!
@ Balham EA
So your agency agreement SPECIFICALLY gives you the right to spend a clients money on anything you want does it?
If that really is the case then no, you probably haven't broken any laws at all. IF they've agreed in writing to let you use their money for your benefit, they can't complain if you do that.
So what happens in the worst case scenario when you don't have enough money to pay your landlords one day? you just tell them that they can't have their rent because you've spent it all, but thats OK because you all said I could keep your money?
I'm willing to bet that isn't their understanding of the agreement
@Balham EA
'My agency agreement allows me to do what I want with client money as long as I dont nick it. If I can pay whoever, whenever what in law is wrong with using client money as I see fit if I have got written permission to do so?'
You're obviously not fully aware of the legal and ethical implications of how you practice in this particular area. I'm also pretty sure that your landlord/clients are not fully aware of the implications of your agency agreement that allows you to use their money in this way.
It's clear from your very disturbing post that you rely on ignorance as a defence but let me just say this, the clue is in the title......'CLIENT' money.
@ Balham EA - Clients money is clients money. Robbing Peter to pay Paul is indicative of a weak business. Sooner or later you wont be able to meet your liabilities and then, the nice people in the Police will provide you with written clarification of which laws you have broken and then you will have a few months inside to read up on this.
"Get back in your tree Mr Sqirrel" - The reason you dont have an overdraft is because you are using clients money to fund your business meaning you have a debt to your tenants hence "Unofficial overdraft"
A debt is a debt. It is not your money.
"as I said the landlords know about it. " - reassuring? No, it's the tenants money - not the landlords. If your landlords realised that in the event of your companies demise THEY would be liable to repay the tenant, what would they say then - they are underwriting your borrowing.
Your cavalier attitude is the root cause of what is wrong with the industry.
You are effectively borrowing money from customers yet offer them no protection in the event things go wrong.
And how is your clients money protected? Howsoever, you are in breach of the rules protecting it.
Always £2000 in credit? Bloody hell, either you are a tiny company or owe shed loads.
Then I read your comment "I gets a bit tight sometimes but there is always a wedge from the new tenant when the old one moves out and we can always delay things till some cash comes in. " and realise its a wind up as no one could be such a simpleton.
Disgraceful.
We always keep at least £2000 in the account so no overdraft here mate! and as I said the landlords know about it.
I gets a bit tight sometimes but there is always a wedge from the new tenant when the old one moves out and we can always delay things till some cash comes in.
Using clients money is a slippery slope - its fine when you can afford to re-pay it when needed - or so it seems - right up until the time when you cant as possibly happened in the case above. Road to hell and good intentions.... ?
you are surely part of a regulatory scheme and are in breach of those rules invalidating your CMP. I'm not part of a scheme so I can do what I like until I haven't got enough to pay what I am asked for. We charge rent 3 months in advance on a rolling program and that does away with deposits, You tell me what law I am breaking!
@BalhamEA highlights why regulation would expose agents who use clients money for whatever they want as use it as an unofficial overdraft.
@ Balham EA - its NOT your money. If you hold it, you are surely part of a regulatory scheme and are in breach of those rules invalidating your CMP, which of course means you aren't legally able to hold clients money.
Mike From Norwich - The Govt wont regulate until they see more agent in a voluntary scheme - if they did, all agents would have to be audited and lots of people would find their money had been used for other purposes and lots would lose out exposing the failings of the current system
In fact I see there's already an e-petition on said subject...
http://epetitions.direct.gov.uk/petitions/19419
It's only got 9 signatures so far.......
@ John Murray
"There can't be many reputable agents who would resist the call for mandatory regulation, given that they are already likely to meet and exceed minimum requirements".
You're absolutely right but how to get us all collectively onside to become an effective lobby for change? As various posters have said here and previously, the existing "regulatory" bodies play a divide and rule game so they're pretty useless.
Just musing but would there be sufficient support to lobby via the Government's e-petitions website? This only needs 100k e-signatures to ensure the matter is debated in the House of Commons. That's not a lot of people if we all promoted the cause to our tenants as well as landlords.............
Looks like the link to my article on why lettings agents should be regulated was stripped out. If anybody wants to read it you can find it here (may need to copy and paste the link)
http://www.emsleys.co.uk/blog/why-lettings-agents-should-be-regulated/
It will also act as a very strong deterrent to those who have managed to convince themselves (and genuinely believe) that they are only "borrowing" the client money for a short period of time.
Where in the Housing Act does it say anythink about not borrowing client money?
My agency agreement allows me to do what I want with client money as long as I dont nick it. If I can pay whoever, whenever what in law is wrong with using client money as I see fit if I have got written permission to do so?
There can't be many reputable agents who would resist the call for mandatory regulation, given that they are already likely to meet and exceed minimum requirements.
With the government seeking to rely on the private sector to meet growing pressure points for housing, it's surely crucial that they take positive action to eliminate out those organisations that drag the sector down - in terms of bad practice, badly run businesses, and at it's extreme (as seen in Oxford last month), dishonesty.
It's obvious to all why Lettings Agents should be regulated (see my piece on the Emsleys Blog http://bit.ly/zKm1S5) - with the exception of Grant Shapps thus far. I'd like to think the government will re-visit this, but I've not noticed them doing much listening to sector concerns (and that's most sectors...)
Obviously we don't know the full story behind this particular case yet, but speaking in general terms licencing / compulsory membership of a body which regularly audits (or at least carries out basic due diligence checks) on client accounts etc is the only way to reduce the risk of letting agents shutting up shop with a large hole in their client accounts.
It still won't get rid of the out-and-out crooks, because, as always, if someone is determined enough to nick the money they will. However, it will go a long way to stopping the many cases where client accounts develop a hole through incompetence. It will also act as a very strong deterrent to those who have managed to convince themselves (and genuinely believe) that they are only "borrowing" the client money for a short period of time.
Without regular audits it is too easy to run the client account of a letting agency like a Ponzi scheme, particularly when you hold the tenants' deposits.
IF all the regulators such as ARLA, RICS joined forces in sending out a consumer message instead of going for one upmanship on each other, the industry would improve.
I agree with London Agent. I like EW's idea, but its a bit long and will probably be made so small it cant be read.
Simply, in the absence of mandatory regulation, an agent should disclose on their website and terms of business under the core terms "ABC Lettings do NOT have Clients Money Protection Insurance and have not joined a voluntary regulatory body"
The disclaimer is a good idea - too many of our landlords seem to think that TPOS is a regualator and have no idea that the OFT logo only applies to sales.
The OFT logo is a bad thing for customers as they cannot believe such a seemingly official endorsement offers nothing other than approval of a sales code of practise.
Despite the OFT badge, the agent may not have ANY training or insurance.... its madness.