Tenants fear for their deposits after agent closes down

Friday 29th June 2012

Yet another letting agent has shut up shop leaving tenants concerned about tens of thousands of pounds in deposits.

Spencer Knight, in the upmarket Cheshire town of Wilmslow, was dissolved on Tuesday.

It is at the centre of fresh concerns that anyone can run a letting agent and take client money without the need to be licensed or vetted in any way, or even to hold the money in a ring-fenced account.

It is understood that police have been made aware of the situation.

The firm had been run by a husband and wife team, Jonathan Singh and Helen Bunch.

However, the pair split up, and Ms Bunch – who had been managing director – resigned her directorship at Spencer Knight last September, and is said to have physically left early this year. She now runs her own agency in Wilmslow, Benson Bunch.

Lettings specialist Rob Smith went to work at Spencer Knight this March, taking on a consultancy role.

Smith, whose own lettings agency is called Inhabit, said: “Mr Singh knew nothing about lettings, so I went to help out – doing the marketing, handling viewings and finding tenants, and so on.

“As soon as I did a spot audit, I realised there was a problem.”

Smith says he immediately warned Singh to put matters right, before leaving the company at the end of March.

He estimates that around £200,000 worth of deposits had been held by Spencer Knight, and said he is now being ‘bombarded’ by tenants demanding to know where their money is.

The management portfolio of Spencer Knight was taken over by Lime Lettings in Wilmslow, whose managing director Peter Luscombe said that the case underlined the need for all letting agents to be mandatorily licensed.

Luscombe, who is a member of the Association of Residential Letting Agents, said he had paid no money for the management portfolio of around 30 properties, but had taken it over on the basis that he would sort out all the problems, audit the accounts and re-protect deposits wherever possible.

He estimated that around £60,000 worth of deposits were unaccounted for within that portfolio, and said he was working closely with the Tenancy Deposit Scheme which has written to some 90 people, telling them that the agent is no longer a member and that their deposits will no longer be protected from September 1.

The lets he has taken on are for between £1,000 and £5,000 a month.

Luscombe said: “This case really shows the need for compulsory regulation of all agents. Financial institutions are not allowed to hold people’s money without being licensed, so why should letting agents be any different?

“In my view, only ARLA agents are currently properly regulated. We have to have our accounts fully audited every year. It is a pain, but at least it reassures our clients.”

In fact, Spencer Knight was a member of the National Approved Letting Scheme. Last night,  a spokesperson said: “NALS has confirmed that Spencer Knight’s NALS licence was terminated on May 10, 2012.

“It recommends that anyone who believes that their deposits are missing should contact the TDS, of whom we understand the firm was a member, to seek reimbursement of their funds.

“They should also report the matter to the police.”

Helen Bunch was invited to comment but declined. She earlier told the Manchester Evening News: “He [Jonathan Singh] shouldn’t have any trouble with the finance. There was no problems when I was there. I have no idea what’s happened to their money.”

According to Companies House, a proposal to have Spencer Knight struck off was submitted on March 13. The firm was dissolved on June 26.

We were unable to make contact with Singh, who is understood to have been ill.

Ben Beadle, head of member relations for the Tenancy Deposit Scheme, said: “Obviously the Tenancy Deposit Scheme can safeguard the deposits of those tenants who have been registered with the Scheme, whether by the agent or the landlord.

"Where tenants are registered, we make every effort to ensure they know their position and what they need to do to protect themselves.

"All registered tenants are covered until September 1 and provided they respond to our letters as they have been asked to do, they will be covered until the end of their tenancy if it is later than that. Any of Spencer Knight’s tenant clients with specific concerns should contact us.”

* So how does a landlord choose a reliable letting agent? See today’s blog by Crystal Horwood, which contains invaluable advice.