Transferring a Deposit Between Agents
Complaint
The Landlord purchased the property with the Tenant in residence. She then instructed new managing agents and asked the previous owner’s Agent to transfer the deposit to her new agents. Following the Agent refusing to transfer the monies, the Landlord referred the matter to my Office.
Investigation
I found that the Agent had refused the money transfer despite having the new agent’s deposit protection scheme membership number and written authority from both the Landlord and the Tenant. However, whilst I acknowledged the Landlord’s frustration, I referred her to the guidance notes issued by The Dispute Service (TDS), the scheme used by both agents. The notes reinforced what the Agent had said throughout, namely that they would remain liable for protecting the deposit if the new agents failed to do so, therefore, the appropriate course of action was for the Agent to give a written undertaking to the new agent to transfer the deposit monies to them after they had provided a valid deposit protection certificate and provided evidence that they had protected the deposit on the strength of that undertaking ahead of actually receiving the monies.
Outcome
Given that the Agent had acted in accordance with the TDS’ rules, I did not support the complaint.
Learning
Security deposit monies are the tenant’s monies until such time as deemed otherwise. Accordingly, the monies must be handled in accordance with the prescribed rules set out by the appropriate deposit scheme at all times, regardless of any contrary instructions received from another party.