Police are looking into a letting agent which has suddenly closed down, allegedly leaving landlords and tenants out of pocket.
One landlord who used Strong Estates in St Leonards, Sussex, says she has lost £700 in rent while her tenants have lost their deposit.
Another landlord said that their tenant’s £800 deposit was missing, adding: “This is a major fraud and it needs exposing because the deposit protection scheme is not going to work if agencies are going to abscond with their money.”
A Sussex Police spokesman said: “We are investigating allegations of fraud against a company. The investigation is in its early stages and we are unable to provide any further information at this stage.”
When Letting Agent Today tried to contact Strong Estates, a recorded voice said that the call service was full and that no more messages could be accepted.
No logos are shown on the Strong Estates website, suggesting it was not a member of any trade or professional body and therefore unlikely to have had Client Money Protection.
Last week, Eric Pickles launched “ambitious” reforms of the private rented sector, but these notably did not include a requirement for letting agents to have CMP.
More here:
http://www.hastingsobserver.co.uk/news/local/estate-agent-leaves-landlords-in-the-lurch-1-5598420
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Comments
Isn't that the same as the Northwood rent guarantee scheme?
Another agent not a member of anything - yet it appears people believe what they read.
From Strong Estates Website:
"If your property is vacant or the tenant fails to pay the rent on time (or at all) you still get paid. You will know exactly what will arrive in your bank account each month for the duration of the contract." - Yep. Sod all.
The also quote: "
Why we excel? - Close, personal attention to detail, with the right team behind you. We’ll work with you to understand exactly what’s most important to you as you make your next move. We’re experts in everything from mortgages to property marketing, so you’re in very safe hands."
To quote EW in his interview today - which looks rather well timed....
"I think that agency is improving for the better but fear we are in danger of adding too many sticking plasters to fix a broken leg. We need cohesive regulation, not a plethora of registers, licences and red tape.
The truth is that an agent or landlord intent on doing something dishonest isn’t going to opt in or comply with any scheme which catches them out.
We need to focus upon consumer redress in a way that the myriad laws and regulation have failed to address. The fundamental problem remains: to whom does a landlord or tenant turn when their money isn’t where it should be?"
I love the sympathy shown by the landlord who she has lost £700 in rent while her tenants have lost their deposit.
I suspect she may find there is more bad news about to head her way.
@Simples I agree, however the cost of enforcement would be significant and imagine the consequences of potentially crystallising debts and losses up to the value of 50% of the deposits taken. Not what the industry wants to hear, however we are where we are…….
CMProtect are doing cut price CMP for £598.80 including vat. that is less than the price of a single average deposit.
Having CMP available only through an organisation that wants to have your accounts audited once a year is the only sensible option for CMP, it should not be available to purchase but should be provided by the agent's regulator as a guarantee od best practice.
Even if CMP were compulsory it has been reduced to nothing more than a tax or expense on theft. It is simply shocking that the TPO condone that.
@Andy - that is a failure of enforcement, not the system per se!
If deposits are not paid into the scheme then agents/landlords should be prevented from trading. Simpes!
@simples, only 50% (ish) of deposits in Scotland have been paid into the scheme........
The simple answer as far as deposits go is to adopt the Scottish system and have ALL deposits paid into a custodial scheme. No agent/landlord can then run off with them!
Industry Observer is quite correct, under present legislation landlords are ultimately responsible for the deposit and will have to cover it.
The whole legislation of letting agents is a joke, including our own NAEA and ARLA. An agent locally has been displaying NAEA ,ARLA and TPO logos but was not a member of TPO. When I brought this to the attentionm of NAEA, the response was underwhelming! 'We will send them a letter and ask them to put it right.' A joke, they have been trading illegally and the association that claims to raise professional standards does not even do a regular cross check with TPO.
Things are never likely to improve until proper, enforced licensing is brought in.
No her tenants have not lost their deposit she will be paying it back to them!!
Making cmp compulsory for agents is the only way to afford even minimal protection assuming of course that the cowboys don't trade claiming they have it when they do not.
The only other route is regulation and licensing for all agents (and private landlords) with severe penalties for breaches which are actually enforced every time.
Otherwise the cowboys will just keep seeing petty theft as easy pickings ("petty theft" being anything up to £100K as opposed to major fraud)