Many Scottish lettings agents are considering selling their businesses as a result of the introduction of compulsory tenant deposit schemes, it has been claimed.
Adam Walker, a broker who specialises in the sale of letting agents, said that until July 2 this year, many Scottish lettings agents had held the deposit themselves and some had used the money to provide working capital for their businesses.
Agents in Scotland now have until November 2 to pay tenant deposits into an approved scheme and he says that some may not be able to find the money in time.
Unlike the introduction of similar legislation five years ago in England and Wales, in Scotland the law applies to existing deposits on ongoing tenancies. All this money must be put into one of the approved schemes.
Walker said: “Over the past few weeks I have had an unprecedented number of enquiries from lettings agents in Scotland and it seems likely that this legislation will lead to a consolidation within the lettings sector.”
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Comments
I agree with Steve, many letting agents have built up a nice personal portfolio on the back of tenant deposits.
How many businesses would survive, it they did not use the deposit monies.
EA's have built up portfolies by selling to each other, so they are not exempt from dodgy deals either. I agree with steve again, stolen or misappropriated client money is the word.
Deposits are NOT the agents, but the clients and or tenants.
I am sure many would have their pants very much around their ankles
All so predictable.
I wonder how the ARLA / NAEA / NALS CMP providers will be affected when the insolvency cycle is complete? Also, are landlords ultimately responsible for the deposit as they are in England and Wales? It could all become very unpleasant.
What the man said: "Some had used the money to provide working capital for their business"
What it really means: "Some have stolen client money to either finance their own unsustainable lifestyle or prop up a failing business".
I wonder how many English agents would be caught with their pants down if the legislation was applied in the same way. I suspect quite a lot.