Rental Tip: Safeguard your deposit
Category Tenant Information
Both landlords and tenants have reason to ensure that their rental deposits are being paid into proper trust accounts when new leases are signed.
This will help them to avoid being scammed by unscrupulous operators who set themselves up as rental agents - especially in areas where there is high demand for rental properties - but are actually not qualified or registered and will often disappear as soon as they get their hands on a few deposits.
The number of reports about fake agents taking deposits from prospective tenants for properties that are not even available to let is rising, while an increasing number of landlords are also discovering that an agent who they trusted to let their property has absconded with their tenant's deposit
Deposits are already the main cause of disputes between landlords and tenants and when they go "missing" the situation becomes even more difficult. On the one hand, tenants often depend on their deposits being paid back with interest at the end of their leases in order to secure a new home.
And on the other hand, landlords whose properties have been damaged cannot recoup the cost from a 'missing' deposit and have to pay for repairs themselves. In addition, they will most likely have to personally refund any portion of the original deposit that is owned to the tenant, with interest.
Consequently, anyone involved in a rental property transaction should be very wary of anyone purporting to be an agent but insisting that the deposit must be paid into their personal account for some or other reason. This is a strong clue that this person is not a registered agent and should prompt a request to see their current Fidelity Fund Certificate.
Legitimate, registered rental agents or agencies are required to keep deposits in trust accounts that are regularly audited. What is more, consumers who deal with such agents are protected against any misappropriation of money by the Estate Agents' Fidelity Fund.
Author: Meg Wilson