I lost the agent and the deposit

Our lawyer, Fiona McNulty, explains the liability of a landlord towards a tenant who has given a deposit to an agent who has disappeared
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© Merrily Harpur
Question: In 2006 I was introduced to a tenant by a letting agent. The agent arranged the tenancy agreement, received the rent and then forwarded it on to me, after deducting his fees. About a year ago the agent disappeared. The tenant now says he paid the agent a deposit and wants me to return it. The agent, however, never mentioned a deposit to me. Do I have to pay it to the tenant?

Answer: Often landlords employ letting agents to deal with the day-to-day management of their properties.

As your agent, subject to the authority you give him, an agent can take many of the actions you could take, and that includes entering into a tenancy agreement and receiving the rent.

When an agent grants a lease, the landlord is only bound to the extent that the agent had actual authority from him, or the agent's actions are ratified after the event.

Your agent has disappeared, so you will need to consider what you authorised him to do. You can't consult him directly, so check your agreement with him to see if it covered taking a deposit.

If the agent went beyond his authority, the tenant would have to pursue the agent personally. If the agent was acting within his authority when it came to taking a deposit, you will be liable to return the deposit in accordance with the lease.

In that case, you could potentially pursue the deposit from the letting agent (if you can find him) under his agreement with you.

What's your problem?

If you have a question for Fiona McNulty, email legalsolutions@standard.co.uk. We regret that questions cannot be answered individually.

Fiona is a partner in the property team at Thring Townsend Lee & Pembertons Solicitors www.ttuk.com.

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