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TODAY'S OTHER NEWS

Scandal: Agent steals £350,000 but pays back just one pound

A lettings agent who stole over £350,000 is reported to have been told to pay back…£1.

Local media in the south of England report that Clifford Wheatcroft’s Bournemouth-based lettings agency Real-Est8 Property Solutions collapsed in 2013; Wheatcroft himself was declared bankrupt at around the same time. 

It was then discovered he had not placed the tenants' money in the secure government tenancy deposit protection scheme, and that he had spent £357,260 from the company’s accounts. 

Now it has emerged that the Crown Prosecution Service has been unable to claim back the money he stole under the Proceeds of Crime Act.

As a result Bournemouth Crown Court has said Wheatcroft will have to pay just £1 under the Proceeds of Crime Act, with the expectation that he will pay more should he ‘come into money’ - which apparently including a lottery win or an inheritance as well as a paid job. 

The Bournemouth Echo reports that judge Stephen Climie QC warned Wheatcroft that the Proceeds of Crime order would be with him “for the rest of his life” adding: "Should he receive a boost in his financial circumstances it will be allowed for some of the money to be reclaimed to pay off the debt.

"He is not getting away with just paying £1 and it's important that is known at a public hearing. A change of finances could include a chance win, inheritance or also legitimate employment.”

You can see the Echo’s story here.

  • Angus Shield

    Why???
    Another set-back for Agents battling to win the trust of the general public whilst being shackled by the like of Shelter, etc...!
    Why did he not receive a short prison sentence or many hours communal service cleaning/gardening repossessed LA properties!!

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    Angus, other new reports state he was sentenced to 17 months in prison suspended for two years and he has to complete 250 hours of unpaid work.
    CPS financial investigations failed to find the missing money. Under the Proceeds of Crime Act he has to pay £1 now but the Proceeds of Crime Order stays ‘for life’ or until the debt is repaid.

     
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    What is interesting is his "flawed business model" which was said to have been a contributing factor. His agency Real-Est8 only charged landlords £50 a month per property for a tenant finding, deposit and rent collection service.
    Now the tenant fee ban is imminent landlords will have too pay more.

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    Well maybe the tight landlords will have to loosen up on what they pay and go to professional qualified agents with CMP and Propertymark registerd agents,
    If he was ARLA registered then the tenant can make the claim for the deposit from ARLA since they Audit his accounts, also since the deposit is the tenants and not the Landlord can the tenants make a private claim against for loss of deposit ,???

    S l
    • S l
    • 27 March 2019 11:54 AM

    the deposit have to be deposited with TDS or my deposit which are approved by the government. Tenant have to put their case forward to TDS or my deposit to get refund of their deposit, not loss of their deposits. If they had caused damage to the property or have rent arrears, these will be dealt with accordingly by deductions of their deposits which i doubt they have good grounds to get full refund of their deposit.

     
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    Landlord had to pay deposit regardless

  • Paul Barrett

    It is NOT often appreciated by certain idiot LL that they are ultimately TOTALLY responsible for deposits IRRESPECTIVE of what their appointed LA does with the deposit.
    Now all these CMP schemes are all very well but a LL simply cannot beat having the deposit monies he is liable for sitting in his bank account.
    CMP is all very well but claims take time to process.
    Mortgage payments CANNOT wait for CMP claims processes.
    Which is why with the click of a mouse or a swipe of a finger I can control all my tenant deposits.
    NO LL should EVER permit a LA to hold deposit monies.
    It is bad enough that LL allow rents to be paid to LA who then transmit a remaining amount once their monthly deductions have been made.
    LA should invoice.
    There is no need for most LL not to receive rents directly into their account.
    With email invoices now possible it should be very easy for LA to send out monthly invoices and for the LL to pay upon receipt.
    Indeed the LL could set up a DD to pay the relevant monthly fees from the LL bank account.
    There is NO need for LA to receive rents.
    Even the dummy LL are capable of checking their bank accounts to see whether rents have been received.
    If not then they can contact the LA to sort out how to manage the alleged rent default.
    There is simply no need for rents to be paid to the LA.
    Removing the temptation of stealing rent and deposits makes for a far more effective LA.
    Those LA that are functional would have no concerns about NEVER receiving or having anything to do with rent or deposits.
    Invoicing is the way to go.
    I strongly suspect that a majority of LA use deposits and rents as part of their free operating capital.
    If LL stopped allowing rents and deposits to be managed by LA I reckon about 50% of LA businesses would fail.
    This would be very good news as it would leave those LA that are operating properly with their own capital as far more effective operations.
    Personally I would NEVER allow any LA I might choose to control rent or deposits.
    If that wasn't acceptable to the LA then I simply wouldn't use that LA.
    LL need to protect thenselves and it remains the case that it is better they receive rents and deposits rather than allow LA to have anything to do with them.

    S l
    • S l
    • 27 March 2019 15:01 PM

    i do like your idea of rent payment direct to landlord. However, if you have letting agent to manage your property, the tenant mostly preferred to pay direct to LA as they trust the office of a LA than an individual landlord. We lost a renewal on that basis itself. strangely enough even though we told them that they save LA fees.

     
  • Angus Shield

    Paul, your remark "I strongly suspect that a majority of LA use deposits and rents as part of their free operating capital" should strike great fear/anger in all of the responsible agents; client money is client money!
    We are fastidious in placing Deposits into DPS, rents due into LL bank accounts, fees into business and VAT in VAT. There are occasions we do not draw our fees to enable a large LL expenditure to be settled in full and protect the relationship with the supplier for other clients' benefit. We are no longer hold let-only deposits obo LL's as we do not wish to be involved in poor management throughout the tenancy and the inevitable deposit argument.
    I worry that there is also the 'reverse' potential that a few LL's might not pay Agents monthly fee invoices also; it is a two way street of trust/business relationship and small claims can be as lengthy as Deposit resolution.
    Remember if the Agent sets up the tenancy, they are liable for all the surrounding compliance at hand-over (and now soon for little or no fee), so I fee the Agent should be collecting the rent, after all they are the tenants point of contact (fully managed), and as such should have the resources to arrange any expenditure including their own charge. If they had to constantly defer to the LL then the LL might as well manage the tenancy and remain compliant.
    I am also surprised how many self-managing landlords are not registered with the ICO when GDPR effects them equally.
    For the honest agent the PRS is becoming a financially challenging environment to even unlock the door and turn the office lights on within. We independents do not make vast profits due to the cost of compliance, etc.
    Your view is interesting and a fair balance of opinion.

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    Use agents for Tenant Find only, they place deposit with dps or tds, both rubbish deposit holders but dont want to hold these funds. None of the " protection Deposit" companies are up to speed using uneducated arbritrators who are getting even better at being clueless. Just be on the ball, Inventories professionally done by a 3rd party, regular Inspections, regular follow up with tenant after Inspections taking photos every time and on Check Out have original Inventory make notes take photos and agree with tenant (if they attend!!!) any deductions. Simples

  • Paul Barrett

    @Anngus Shield
    Yep I fully concur with you that you are scrupulous with how you manage your business.
    Yes I fully understand all the compliance issues etc that LA face and how it is increasingly difficult to remain viable with all the regulations that are being imposed across the PRS.
    I consider the situation from a very parochial perspective.
    That is I want my liability and my monies with me to reduce the temptation for LA to do a runner with my monies which ultimately I am liable for.
    There really is NO need for LL to allow LA to have anything to do with rent or deposits.
    Quite frankly from the LA perspective it would be far more beneficial if they indeed had nothing to with rent or deposits.
    The LL will be totally responsible as the law states.
    A LA should be able to operate viably without deposit or rent receipt responsibility.
    Invoicing should be a totally effective strategy.
    Personally I would have no issue with having a DD set up to pay for monthly management fees along with any other additional costs that may be chargeable as a consequence of works a LA has to do.
    Of course there will always be LL that prefer LA manage everything for them.
    But it should be the case that for those LL that do NOT wish the LA to control rent and deposits that they offer an invoicing methodology.
    Offering such a process will enable LA to obtain 2 parts of a business.
    Reluctant LL like me that DON'T want LA having anything to do with rents or deposits and those LL that want the full service

    Perhaps a reduction in management fees if the LL takes FULL responsibility for deposits and rents with a lower normal monthly managenent fee as a consequence.
    I have no idea how much management time a LA has to devote to rent payments.
    But I would suggest that a lot of time is spent just on rent management.
    LA have better things to do than chase tenants who refuse to pay rent.
    Let the LL decide what they want to do when the rent isn't received directly from the tenant.
    I check my rent receipts every month and if rent isn't there I call them.
    Now if I had 100 properties I might use a LA for FULL management but as I am a very little LL I can check myself without any problems.
    LA will have to become far less prescriptive with their terms of business if they expect to hang onto LL who recoil with horror at the prospect of an UNREGULATED LA doing a runner with their rent and deposit monies.
    CMP simply DOESN'T provide instant liquidity that having the resources controlled by the LL does.
    Liiquidity is vital if mortgage payments are to be made.
    Personally I would not have the luxury of time while a CMP claim was progressed.

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