Probe highlights ‘scandal’ of deposit scheme ‘piggy banks’
Letting agents helped themselves to more than £1m from tenants' deposit schemes last year, a BBC probe has revealed.
BBC Inside Out South West interviewed tenants and landlords owed almost £35,000, with landlord Steve Emery-Wright owed more than £4,200 by Letting agency Premier Property Management of Truro, Cornwall.
Mr Emery-Wright told the programme he had been waiting 18 months for the money after the firm’s owner avoided him and sent cancelled cheques.
The BBC investigation was aired in the same week as letting agent Tahir Khan was jailed for 45 months by Bolton Crown Court for illegally retaining £130,000 of deposits.
His conviction takes the total of tenancy deposits stolen so far in 2017 to £146,000.
Ajay Jagota, founder of sales and lettings firm KIS, said: “For too long it has been the letting industry’s dirty little secret that deposits can be used as personal piggy banks which firms can dip into whenever they see fit. In the age of insurance, there is no need for cash deposits to be taken at all, with landlords better off protecting their properties against careless tenants”.
Since 2007, landlords and their agents have been legally required to put every tenant's deposit in a government-backed scheme, such as the Tenancy Deposit Scheme.
But the cash can either be held in a custodial account run by the scheme, or a bank account, which the landlord or letting agent can access at any time.
It is estimated that £2.4bn of the UK’s £3.2bn deposits are held in schemes retained by tenants’ landlords or letting agents.
In 2016, a total of 14 letting agents were convicted of stealing £1,018,100 of deposits, the investigation showed.