I have discussed this situation before, but am prompted to write about it again, as a result of the recent experience one of my Landlord Law members.
He tells me that he arranged for a letting agent to protect the deposit, which they did with My Deposits. He then went away travelling for a year. While he was away, the agents ceased acting for him save for looking after the deposit. However then, unbeknown to him, the agency busienss was sold to another company.
The landlord, on returning back to this country, found that the new company had no record of receiving the deposit money. It also seems that My Deposits wrote to him and to the tenant telling them that the deposit was no longer protected, but neither appear to have recieved the letter.
The landlord is therefore left to pay the deposit money back to the tenant out of his own funds. He is also at risk of being sued by the tenant for the penalty of three times the deposit sum, as the deposit has been unprotected for some time.
This just goes to show that often the DPS is the best and safest scheme. Here the money is actually handed over to the scheme administrators so there can be no question of it getting lost and the landlord having to foot the bill.
What do you think? have you experienced this type of situation? Were you able to resolve it?