Hi All, My friend bought property with tenant in situ. tenant is good and he is a DIY landlord and wants to continue with this tenant, but seller’s lettings agent is not releasing tenancy deposit to my friend. they want to charge fee for introduction of tenant but new owner has no obligation or contract and new owner does not want to pay any fee. but estate agent is not backing down. what are new owner’s options to get tenancy deposit. as new owner likes to keep deposit and protect with ‘me deposits’ government scheme. thanks
Your friend has taken over responsibility for protecting the deposit via a govt approved scheme.
As part of purchase friend should have insisted on agreement to transfer old deposit over to you as part of purchase contract. If they didnt they cant force estate agent/previous LL to transfer to you at all.
So either they pay agent to release it, or they have to put a protected deposit in place themselves so that it can be returned at end of tenancy.
Could try to claim from friend’s solicitors as clearly not very competent not to deal with this as part of the purchase - good luck with that tho.
Ask deposit scheme where old deposit held also as this must have happened before with other LLs. As previous owner is no longer LL for the tenancy, if friend can prove that and that friend is now the LL (and have followed all the steps to transfer the tenancy) they may transfer to you anyway- remember its the tenant’s £ not yours or the previous LL’s and it is associated with the tenancy/tenant not the LL.
However I suspect friend will have to pay agent/past LL to transfer the deposit. Unfair but should have been dealt with by friend’s solicitors as part of purchase contract…
Good luck
Good luck
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Check with your solicitor if there was a contractual clause in the sales contract for the deposit to be transferred. If so, get them to contact the sellers solicitor and demand this happens.
Even if not, under the Housing Act, you have automatically obtained legal rights & obligations of the Landlord. This does mean that you now have an obligation to protect that deposit, and I guess it would be fair for the agent to charge you a fair fee to cover their admin, but not a higher ‘tenant find’ fee.
How much fee are they asking for?
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they have been talking about charging ‘introduction fee’ - this is not due as new owner inherited tenant-new owner wanted vacant possession but seller insisted on tenant-in-situ. it is estate agent’s legal obligation to transfer tenant deposit to new ll. there was no contractual clause in sales contract for deposit to be transferred, likewise there is no contractual clause in sales contract for seller’s estate agent to charge any fee to release deposit or the ‘introduction fee’ agent wants to charge now.
i do not see why new ll needs to pay any money whatsoever to agent. all along my friend was being cautious about tenancy and tenant-in-situ and all documentation, not about rogue estate agent to be honest.
how much is the fee? might not be worth the hassle of challenging it considering all they’ve paid for buying a house anyway.
First red flag.
If you know that to be true then why not talk to a solicitor rather than to a forum?
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@chawal2 it’s nothing to do with what ‘you do not see why’. If they were being cautious they would have insisted this was sorted as part of the purchase contract with seller, not left as a loose end. If you believe legally previous LL/seller has to transfer the deposit, get legal advice to confirm that and pursue action against seller. I dont think it’s true tho [from what I’ve read elsewhere]. It’s a loophole and one reason your friend should have insisted on sorting as part of purchase.
This is what Shelter say [google ‘Change of landlord or agent: What happens to the deposit’]
"If the property is sold to a new landlord
Your deposit is usually passed to your new landlord as part of the sale.
Your new landlord has 30 days to:
protect your deposit
give you information about which scheme it is in
You can claim compensation from your new landlord if this does not happen.
If the deposit is not passed to the new landlord when the property is sold, the old landlord is still responsible for protecting it.
You can claim compensation from your old landlord if they do not continue to protect it."
so friend will be up against a clock of 30 days to protect deposit.
Good luck
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This seems to contradict the bold part of your post. The new LL (the friend) hasn’t actually received the deposit yet so the clock hasn’t started for them.
Hmm I’m not 100% sure but I understood [having read elsewhere] that the new LL has an obligation to protect the deposit within 30days of property purchase -even if not received from previous LL - yes crazy I know. Which creates a situation where if not transferred, new LL has to create a new protected deposit of same amount £Xin order to be able to return £X if tenant leaves etc. The fact the previous LL didnt authorise transferring over to new LL is hardly the tenant’s fault after all. A total mess, as the old LL also cant use or claim against the old deposit either because the tenancy hasnt ended while they were LL. So it sits in the deposit scheme protecting nobody and inaccessible.
If it was only to protect within 30 days of receipt that clearly wouldnt make any sense and wouldnt work, because then whenever a previous LL doesnt transfer, the obligation to protect wouldnt exist, which definitely wouldnt be what the legislation intended.
Anyway @chawal2 ‘s friend can ask deposit scheme for advice and/or their solicitor, as you suggest
Best
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thanks David. The deposit scheme has informed that agent is keeping the cash so deposit scheme will only intervene when at end of tenancy the tenant does not get the deposit back. so i believe best option is if new ll asks tenant to end the existing periodic tenancy and so they can get their deposit back from deposit scheme if agent does not give them. tenant is good and wants to stay in property so i believe new ll can request tenant to give the notice to new landlord and ask deposit scheme to return the deposit stating that new landlord has not received and old landlord’s agent not returning. any problem you perceive in this? 
thanks a lot David
That’s encouraging. Check with deposit scheme what will actually happen if old LL /agent refuses to authorize the return of the deposit at end of current tenancy even tho they are no longer the LL.
But sounds like a plan to me. IF deposit scheme will return old deposit to tenant. That way LL and tenant can start a brand new tenancy agreement which is anyway a good opportunity to go through terms, expectations on things like inspections and access for trademen to do maintenance etc. It will maybe cost a small amount to set it up if doing via OR not using own AST, and all the same things apply as usual for a new tenancy - serve copies of the ‘how to rent’, epc, eicr, gas certificate, prescribed info all over again. And tenant will receive old deposit back and have to give LL the new deposit to be protected. May be worth doing a new inventory or signing old one as still up to date & accurate.
Only issue would be if any damage caused to property or arrears since start of tenancy/if didn’t want to return all of original deposit in full. Or if epc has expired LL would need to get a new one.
Because could be a delay getting old deposit returned after end of original tenancy, tenant may need to wait for that before they can pay a new deposit so LL may have to wait on that a bit after new tenancy starts
Good luck, keep us posted on what happens…
main issue is that contact details for the old LL are no longer valid when, in years and years, the tenant wants to leave. By leaving the deposit with the old LL, the T is risking never getting their deposit back at all and the new LL will have no deposit to claim anything from.
You need that deposit. Again, how much is the fee they are asking for? You haven’t told us.
@tatemono that’s why ending tenancy now and getting deposit back to tenant, IF deposit scheme will do that, and starting a new tenancy, as @chawal2 suggests, would be a good idea
From description deposit is registered by the agent not the LL, so unless they up sticks v soon, the deposit scheme knows where they are. Think they probably legally have to tell deposit scheme if they change address anyway.
And if new LL and tenant can prove new LL is responsible for the tenancy and tenancy ends properly, the deposit I ‘think’ legally has to be returned to the tenant by the deposit scheme unless LL makes a claim for it (which new LL wont). The only issue is whether the deposit scheme can return direct to the tenant (which is what OR do as I understand it) or if they return via the old agent /landlord- if was originally deposited via them. Hopefully @chawal2 can sort out what exactly would happen with deposit scheme…
thanks David. deposit scheme will chase estate agent if tenant raises dispute with them. and tenant is nice person so can give new ll notice to vacate, and get deposit back via this route. and then start new tenancy in same property as he is not willing to change property
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I presume they already charged the original landlord, so I would tell them to take a hike.
Also if the tenant was still inside the original term contract the agent would likely have charged them for the termination.
You are not liable for the previous owners letting management contract with this agent.
Contact the solicitors and insist the bond is released to your friend.
Alternatively advise the tenant they need to pay a deposit into your TDS and reclaim the one from the original landlord / agent.
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For clarity for the OP, the T pays you directly and then you place the deposit with TDS if you’re doing custodial or keep it if you’re doing the insured scheme (ideally a business account).
But yes, you had a solicitor for the sale and this is their job to act on. Instruct them and get it sorted. A strongly worded letter from your solicitor to the letting agent should suffice.
thank you to all of you. you are great help. so my friend took help from chat gpt and sent strong worded email to estate agent and after some more hiccups and my friend warning of complaining to property ombudsman, they r saying they will transfer funds providing my friend registers the tenancy deposit first. a bit bizzare and uncalled for, but will have to first protect funds then get refund from agents.
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sounds OK actually. You don’t want the deposit protected at any point so this will ensure continuous protection.
Make sure you serve teh tenant all the legally required paperwork in connection with the deposit. Ask ChatGPT if you aren’t sure what this is 
Well done for getting them moving
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well my friend has multiple rental properties although tenant in situ is the first time-and did not expect estate agent to give trouble. so they know all documentation to serve to tenant being DIY ll. but thanks for warning and advice. 
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As an ex estate agent of 20 years. Simply ask the agent to produce the terms of business that you signed. When they cant produce them then there is no fee due.
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