Missing rental deposit from agent

[londonbarry]

My partner and I had an investment property in my home town and paid my sister, �75 per month to maintain the property. She enlisted a friend of hers lettings agency, who placed tenants for us. All of the agreement side was handled by the agency, but the day to day maintenance was handled by sister including collecting the rent. I understand that the tenant, paid �1000 deposit directly to the agency.

When the tenancy finished, my sisters friend is now unable to pay the deposit back as she says "she hasn't got it", her words. She admits that she had it, but she is now in financial difficulty and unable to pay it back. My sister has said she never saw the money so she's washed her hands of it.

As you can appreciate, my partner and I have also had nothing to do with this money. We did not receive it nor issue a receipt, neither have we seen a receipt that confirms that any transaction actually took place.

We have received a letter from the Citizens Advice Bureau, requesting that we reimburse the tenant the �1000 by 26th August or face legal action.

What is our legal position regarding this. I cannot see how we can persue the agent as we never gave her any money. I have no receipt to show that any money changed hands. How should we proceed with the CAB?

[Mrs_Pegasus]

I think this is a matter for a solicitor.  If there is no receipt then it would be difficult to prove but the chances are due to the sum of money that it may well have been paid by cheque which is easy to trace.

Is this 'friend' an established agency, or is she a sole trader and it may result in you having to pay your tenants and then pursue her through the courts.

[prince_eric]

I'd suggest you take some responsibility for your mismanagement of this whole affair and give your tenant back their �1000.

It's hardly their fault you made such a mess of your side of the deal. If you're trying to wrangle your way out of paying you should be ashamed, and have no right to be in business.

Pay the tenant and chase your sister's friend for the money.

[twiglet4frog]

Ask the tennant for the contract/receipt stating who the deposit was paid to, if it has your name on it as one of those that received it and if it went to court u would be liable to pay, however if there are records of the letting agent receiving the deposit and no receipt of paying it to u then u can claim it in court from her regardless of if she has it or not! Whether the court would accept that u arent on the receipt/contract and never received the deposit as the letting agent was arranging and holding on to the deposit side is up to the court to decide.  Best get all your facts and consult a solicitor.  Doesnt sound like your sister is to blame in any of this from what we know of what u said as she never handled the deposit but merely found u a letting agent that u agreed to. I think it will cost u in the short term but it seems u will be getting into a whole heap of court letters and legal action to get it back from anyone that is responsible. Also, if citizens advice has written u a letter stating a date to pay by it seems that they have reason to believe the deposit was paid which may mean that they have seen the receipt for the deposit/agreement from the tennant.

[londonbarry]

Thanks everyone for your replies which is what I thought. I totally agree with In A Pickle that I need to see a copy of the receipt. Another reason for this is that I assumed the deposit was one months rent, but I only charged the tenant �750, of which I paid my sister 10%. I never recalled that it was �1000. I have sent all the details to a solicitor now so I'll see what happens.

Thanks again,