The cash value of tenancy deposits crooked landlords and letting agents have been convicted of pocketing in 2018 has already passed £750,000 – in 2017, it took until October for that level to be reached.
Deposit-free renting firm Dlighted, which operates a ‘totaliser’ of stolen money by analysing reports of offences, last week said deposit thefts rose 14 per cent in 2017, with £1,162,037 of tenant’s cash proved to have been taken over the course of the year.
This week’s conviction of Clifford Wheatcroft, formerly of letting agents Real Est8 Property Solutions of Bournemouth, takes 2018’s total to £776,699 – before the end of February.
Wheatcroft was spared jail after admitting to using £357,260 of tenant’s money to fund a “lavish lifestyle” and to prop up his business instead of placing it in a deposit protection scheme.
He was given a suspended prison sentence and 250 hours or community service.
Dlighted’s founder, the renting reform campaigner Ajay Jagota, is now heading the #ditchthedeposit campaign, which seeks government backing for landlords and letting agents replacing traditional tenancy deposits with deposit replacement insurance.
"Cases of deposit theft are becoming increasingly common and in my opinion will increase even more dramatically once the tenant fee ban is in place” he says.
“A lot of the attention in this case has about how the stolen deposits were used to fund shopping trips and holidays, but for me a much more telling factor is the convicted agent’s admission that he started using deposits to keep up other payments when his business ran into difficulties.
"As we have seen in many case after case the temptation is too great for agents to utilise tenants deposits to prop up failing businesses. It’s common knowledge that the fee ban could cost agents between 20 to 30 per cent of their revenue, evaporating their profit margin and increasing the temptation to misuse cash deposits.”
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Frankly, it's about time DIY landlords had to comply with the same legislation regarding redress schemes as we do.
I think it's set to get worse as agents are less incentivised to provide a good service to tenants once the government prevents us from being able to charge tenants for providing them such a good service.
I can imagine tenants will start being treated as a second class customer... Its like banning the sale of first class and business class travel and expecting airlines to treat first class and business passengers in the same high regard without being paid for it...
I'd agree, landlords whether they self-manage or let properties through an agent should be held to the same standard. I'm less inclined to agree with your other comments though. Agents are employed by landlords, not tenants though it would seem the latter bear the brunt of the charges, at least initially. The average tenancy start up fees are reportedly £404, and renewal fees £117.
I simply can't understand how setting up a tenancy, referencing and other checks can amount to £404, apparently £813 in some areas. Renewals seem even more of a scam considering a tenancy doesn't actually have to be renewed and can be left rolling after the initially agreed tenancy duration.
I'm not sure why you should treat tenants any worse after a ban or cap on fees is introduced, my understanding is that in the majority of cases, agents are paid a percentage of the rent by the landlord, rather than wholly be fees at the start of a tenancy.
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