Lettings managers disqualified for failure to safeguard tenants’ deposits

A lettings manager who failed to safeguard tenants’ deposits has been banned from acting as a director for six years, it has been revealed.

According to the Insolvency Service, which handed down the punishment, the Exeter-based director accepted a disqualification order for breaches of the Housing Act 2004.

The report shows that the perpetrator was appointed director of Clear Lettings Limited in 2007. Around the same time, the company launched a custodial deposit scheme, meaning it was approved to safely hold onto tenants’ deposits on behalf of landlords.

However, it was discovered that from between June 2016 and April 2019, the director “caused Clear Lettings failure to comply with its statutory obligations to properly safeguard more than £68,000 worth of tenants’ deposits.”

The investigation revealed that the perpetrator did not pay the deposits into the Government-backed custodial deposit scheme, spending the £68,000 on the general running of the company instead.

The infringements emerged after the company entered into liquidation proceedings in April 2019, triggering investigations into the company’s finances.

Commenting on the case, Dave Elliott, Chief Investigator for the Insolvency Service, said: “[The director] failed to safeguard the deposits she was entrusted to hold onto, resulting in losses to both landlords and tenants.

“Her conduct fell short of what is required of a director of a limited liability company and her disqualification will act as a deterrent to others from similar conduct in the future.”

Under the terms of the disqualification order, the lettings manager is banned from acting as a director or directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company for six years.