Letting agents 'should be audited'

News Category: Industry News

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Landlords could have to cover their tenants' deposits if their letting agent does not properly audit its incoming money.

That is the opinion of Eric Walker, managing director of London estate agent Bushells, who told Estate Agent Today that letting agents should be independently audited.

Mr Walker explained that some letting agents are trading insolvently by paying outgoing tenants and landlords with incoming money from new deposits and rents.

He said: "The real time-bomb is where agents hold the money in their own account and register it with a scheme, then for whatever reason cease to be members of that scheme."

If a landlord's letting agency misappropriates the deposit money, the landlord is required to cover it. If they do not, they face a fine of three times the amount of the deposit, he added.

Mr Walker's suggested solution is that only letting agents registered with Arla, Rics and the Law Society should be allowed to hold clients' money.

Half a million deposits are currently protected by the Deposit Protection Scheme.

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