A landlord is ultimately responsible for ensuring that any
deposit he takes from a tenant in respect of an AST is protected
and that the statutory requirements of tenancy deposit protection
are met. However, a landlord may choose to use an agent in respect
of these tasks. This note relates to the scenario of 'let-only'
agents whereby the agent arranges the letting and receives the
deposit from the tenant, but generally passes it straight on to the
landlord. The responsibilities of the landlord and agent in
relation to deposit protection in this scenario will depend on the
contractual arrangements between them.
a) Let-only agent, with landlord completely responsible
If the contractual arrangements are such that the agent is not
tasked with any responsibilities in relation to protecting the
deposit, when a let-only agent receives the deposit, he would pass
it straight to the landlord. The landlord would need to protect it
with a scheme himself, and provide the prescribed information to
the tenant within 14 days (increased to 30 days with effect from
2nd April 2012) from the agent having received the deposit. Clearly
in this scenario it is in the interest of the landlord to ensure
that the agent is aware of his contractual responsibility to pass
over the deposit promptly to facilitate this process for the
landlord. However, if the agent does not pass over the deposit
promptly, the landlord is still responsible for protecting the
deposit within 14 days (increased to 30 days with effect from 2nd
April 2012) of the agent having received it.
b) Let-only agent, with agent tasked with acting on behalf of the
landlord
Section 212(9) of the Housing Act states that references to a
landlord in relation to any shorthold tenancy include references to
a person acting on his behalf in connection with the tenancy. The
landlord can therefore task an agent to act on his behalf in terms
of protecting the deposit. If the arrangements between the agent
and landlord are such that the let-only agent is contractually
responsible for protecting the deposit on the landlord's behalf,
then the agent would be responsible and is potentially liable to
prosecution if he fails to do so (by the landlord). The landlord
would be well advised to satisfy himself that the deposit has been
protected, and that the statutory requirements have been complied
with, so that he can take action against his agent if necessary
(outside of the scheme).
Note that in a let-only scenario, the full value of the deposit
must always be protected, even if the agent takes some fees off of
the deposit for their services to the landlord