An ARLA firm that is in the process of being liquidated has been the subject of complaints to police.
The liquidators of Charterhouse, in Essex, are liaising with both ARLA and the TDS to try and get money paid to creditors.
Police have also confirmed they are investigating.
Charterhouse Professional Property Services, formerly Walker’s Professional Property Services, operated in Brentwood, Essex.
It ceased trading on May 13, apparently with debts of up to £754,000 owed to over 100 creditors.
Ian Potter, managing director of ARLA, yesterday confirmed that Charterhouse was an ARLA member, adding: “Landlords and tenants that use ARLA member agents benefit from ARLA’s Client Money Protection scheme.”
The firm was run by Jeffrey Terrence Gadsden, with a registered office at Bleak House, High Street, Billericay, according to a report by London liquidators firm Benedict Mackenzie.
According to the report, after September 2012 “[Mr Gadsden] remortgaged his property and used that money to support himself without drawing a salary from the company”.
It continues: “The final straw was when one of the company’s biggest clients gave immediate notice to terminate a contract and the company’s letting staff gave notice to leave the company.”
The report states that “in the last 18 months there was very little income into the company”.
Liquidator Grant Pegg, of Benedict Mackenzie, said: “We are liaising with the Association of Residential Lettings Agents, the National Federation of Property Professionals, the Tenancy Deposit Scheme and the company’s insurers in order to expedite payment of monies to all affected parties.”
A spokesman for Essex Police said: “A number of complaints have been received about a company in Brentwood and inquiries are continuing.”
* Any landlord or tenant who has not received funds to which they feel entitled should visit the ARLA website (link below) where an application form for compensation can be found. Alternatively, enquiries can be made on 08443 870555.
www.arla.co.uk
Brentwood Gazette report:
http://tinyurl.com/mr8enjv
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Comments
@E
You'd better have a word with IP then
IO - sorry, but their 'first resort' concept, so widely promoted by ARLA following their panning in the Evening Standard in 1999 ish? for the abject failure of their previous offering to provide acceptable consumer protection was the watershed.
Whatever you were told two weeks ago doesn't stack up I am afraid. The only good thing is that it is not being promoted as 'their' USP as far as CMP provision is concerned.
Regards,
E
@eromallid
You make a fair point, but in all such cases a Landlord can't simply ring up ARLA and ask them to post him a cheque for his alleged loss.
There has always been a need to gather evidence, but what happens in a non first resort policy (which is what all those covered by these 2 new schemes will have to do) is try and chase the agent's own existing insurer, and even go to the police before the cmp insurer will even entertain a claim.
Your point on Receivers etc though is well made. If the loss is clearly demonstrable by the presence of a Receiver then ARLA should pay and then seek to recover from elsewhere.
My guess is it is the sheer scale of this failure that is causing ARLA to draw as much breath as they can before wading in.
Hi IO
Without splitting hairs, if it were to be structured as that which I understand to be the original definition of 'first resort' CMP, delays in granting indemnity caused by insurers interfacing with Administrators, Receivers or Liquidators wouldn't actually feature. ARLA's boastful claim was always that a claimant only had to demonstrate loss / monies owed from their member and their CMP facility would respond immediately - that was their USP and is not now the case.
The Q & A's (NFoPP) which now appear, do not convey that at all?
Hi Eromallid
All I can tell you is the answer I got from the very top of the organisation when I asked that very specific question a fortnight ago.
ARLA say their policy is still one of first resort and I see nothing in what you quote to change that.
I do take the point on NAEA though - theirs never was a first resort policy and I doubt it is now no matter what umbrella they shelter under
Hi I.O.
Under the CMP Q & A's on the ARLA website:-
Q. How long will my claim take?
A. This will depend on the information you provide us with and the circumstances of the claim. It might even require liaison with an administrator, receiver or liquidator appointed to wind up the agent's business. NFOPP will endeavour to get this completed as quickly as possible but it is not always within their control. Prompt responses from claimants, for further information, assist this process.
Also this is now 'billed' as the NFoPP scheme whic presumably includes NAEA - in which case they are 'first resort'? I don't think so.
@eromallid
No ARLA is still a cmp policy of first resort I assure you.
In answer to the question "What about the ARLA audit", the weakness is further back down the accounting chain.
There is no legal requirement for a small company to submit audited accounts. It follows that when a firm's accounts are prepared the accountant simply reports on what is shown to him. With a bit of effort a director can hide stuff hat never appears in the accounts.
In turn the ARLA audit is based on checks and information based on unaudited accounts - but won;t find anything that was hidden in the first place.
TDS cover - ARLA's insures repay
2 issues - any money owed to Landlords from tenants deposits is NOT covered - eg arrears
What about the ARLA audit? Surely that must have flagged some issues.
Um - yes, but it all depends on whether TDS Ltd still have the wonderful ODPM / CLG approved 90 day cancellation / unprotection rule. Never mind they are rumoured to be underwritten by the same CMP insurers as ARLA, so probably won't make much difference.
Also, I think you will find that since the NFoPP integration, the 'first resort' boastfulness is now purely a fluffy PR memory....... ahh
What has it got to do with TDS? Under their own rules and insurance they only protect amounts in dispute NOT the entire deposit.
And even then only if a dispute has been raised but then the agent cannot, when demanded, pay the money into the Scheme while they adjudicate.
This all harks back to the big northern case last year when TDS were approached and allegedly paying out deposits to tenants. There is no liability on TDS at all -
however for ARLA on the other hand as policy of first resort...........!!!!