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The Property Ombudsman scheme expels London Corporate Apartments following deposit dispute

Tuesday, May 23, 2017 - The Property Ombudsman

The Property Ombudsman (TPO) has issued a warning to landlords and tenants that London Corporate Apartments Ltd (LCA) has been expelled from their property redress scheme for failing to pay an award following a rental deposit dispute.

Every sales and lettings agent in England is required to register with a Government approved redress scheme, which enables consumers to have their complaint reviewed independently in the event of a dispute arising that the consumer is unable to resolve with the agent directly.

LCA’s expulsion prevents the firm from registering with TPO for lettings or sales redress for a period of two years - and an agreement between all the existing redress schemes means that LCA will not be able to register for any form of redress until the award is paid. Redress registration is required for LCA to trade legally.

LCA’s expulsion follows a complaint concerning the return of a deposit at the end of a rental agreement. The complainant contacted TPO after they were unable to resolve the dispute with LCA.  The complainant disputed the deductions made from the deposit and also claimed that the agent had failed to return the deposit in a timely fashion.

Katrine Sporle, Property Ombudsman said:

Agents that agree to join our scheme must offer consumers the highest safeguards. This agent failed to investigate the original complaint satisfactorily and did not provide any written evidence to contradict the claims made against them about the rental agreement and the disputed deposit deductions.

The Ombudsman reviewed the complaint and found the agent fell short of the standards required. The Ombudsman instructed LCA to pay an award of £340 as full and final settlement.

LCA was expelled from TPO for breaching the terms of its registration when it failed to pay the award. TPO’s independent Disciplinary and Standards Committee  ruled that the agent will not be able to register for sales or lettings with TPO for a period of two years.

Katrine added:

Refusing to fully cooperate with a complaint does not make the issue go away. In this case, I had the rental agreement and other information from the complainant but no information from the agent.  I therefore decided that the complainant's version of events should be accepted and the complaint supported. By refusing to pay the award, the agent is now unable to trade and risks a fine from Trading Standards should they try to do so.

If an agent is expelled from TPO for failing to pay an award, they are reported to Trading Standards and are at risk of a fine of up to £5,000 for each branch found to be breaking the law by trading without redress registration.

Landlords, tenants, buyers and sellers are being urged by TPO to always:

  • Check their agent is registered with a Government-approved redress scheme – every sales and letting agent is legally required to register with an approved redress scheme.
  • Make sure their agent has protected a deposit with a recognised Tenancy Deposit Protection Scheme – the law requires tenancy deposits are held by a Government-backed scheme.

Commenting on the case, Gerry Fitzjohn, TPO Board Chairman, said:

Every agent registered with TPO is obliged to comply with awards made by the Ombudsman and co-operate with investigations. LCA breached both fundamental requirements and, without redress registration, is now unable to trade legally".

According to TPO, LCA was last known to be trading from Unit 107, 93-101 Greenfield Road, London E1 1EJ (Company Number: 08896663).  TPO has provided the complainant with guidance to seek payment of the award by alternative means, such as the small claims court.

London Property Licensing has produced useful advice about choosing a letting agent, which is available here: www.londonpropertylicensing.co.uk/choosing-letting-agent.

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