Thousands of pounds of landlords’ money may be lost as a result of the administration of high-profile London lettings agency Douglas & Gordon.
In February this year Douglas & Gordon called in Grant Thornton as administrators after the agency failed to secure investment; since then, the lettings book and D&G brand have been purchased by former D&G chief executive James Evans, who continues to use the brand name as part of his Brewham Holdings company.
However, the administration of the former business continues and over the weekend Grant Thornton released an update on its work.
It says that a Client Money Account has been identified containing £51,405 of landlords’ rent and tenants’ deposits; this has been paid into the administration account.
In addition another CMA holds other funds - not revealed by Grant Thornton - which is likely to contain other rent and fees relating to the old agency’s lettings business.
Grant Thornton says: “A reconciliation of this account shows this account holds, and has so for many years, funds which have not been able to be returned to the landlords or tenants due to various issues. Such issues include not being able to locate the tenant or landlord or disputes which had not been resolved. This is despite efforts made by the company to return such funds to its rightful owner.”
Elsewhere in the administrators’ report it is revealed that secured creditors are likely to receive most money owed to them but there is less certainty over unsecured debts. There are 154 unsecured creditors with claims worth £412,379.
While some 50 employees were made redundant at the start of the administration, 15 others within the lettings business transferred to Evans’ new business and six wereretained to help with the administration process but thave since been made redundant.
Read the latest Grant Thornton report here.
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How are 'ring-fenced client funds' being held/taken as an administrator? If this is am legitimate process, then surely this is what CMP is for. Either way, landlords and tenants should not be out of pocket. Is anyone having similar thoughts?
@KB, very unusually I largely agree with you for once... the whole point about Client Money Accounts is to protect clients' money by keeping it separatly in that, or those, accounts from the agent's money.
In the event - as has happened here - of agent insolvency it should not be included in the agent's "assets" for distribution to creditors but of course returned to the aoproprate clients, ie landlords or possibly tenants (e.g. deposits or rental overpayment) or very occasionally some prospective tenants (e. g. holding deposits).
The administrators will of course rightly take control of the CMAs but only to ensure they are properly handled and correctly passed on to the rightful landlords after being properly accounted for and checked....
....so far you and I are in agreement for once...
Where we may have a difference of opinion is over what this article is actually about and saying... It seems to me to be very badly written, apparently by someone who doesn't understand any of it or perhaps just wanted to sensationalise the article with a highly misleading headline.
SOME landlords and tenants might lose SOME money if it has been mismanaged, or not properly accounted for or the agency has lost contact with them (as mentioned) - but otherwise they should eventually get most if not all of it back but there might be a quite lengthy delay due to the process.
Sounds as though they dont know whom it belongs to so its gone to the administrator. Almost certainly the article is a truncated press release.
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