A lettings agency being put into liquidation owes landlords almost £500,000 in unpaid rent.
Local media in the Midlands report that the Homepoint agency - with branches in Wolverhampton, Stourbridge, Walsall and Birmingham - owes £118,145 to tenants who lodged deposits with the company and £459,553 in rent collected from tenants but not passed to landlords.
A letter to creditors from insolvency consultancy Moore, which is handling the case, says that Homepoint, run by Ajit Singh Pooni, owed money to 328 creditors including a large number of tenants who had submitted deposits for properties they were renting.
The Express and Star newspaper, based in Wolverhampton, reports: “But while it is a legal requirement that deposits are placed into a government-recognised deposit protection scheme, the report to creditors revealed that in many instances this had not been done. It also said that the company had collected rent money from tenants, but not paid it to landlords.”
The newspaper says a report to creditors blamed the tenant fees’ ban in 2019 for the agency’s problems, accentuated by the spring 2020 lockdown.
Major creditors include HM Revenue & Customs which is owed £72,078 in unpaid VAT, and Lloyds Bank which is owed £160,347, including a £50,000 loan through the government’s Bounce Back scheme.
Pooni, the owner, is also seeking the repayment of a £287,924 loan he gave to the company, and a further £107,520 owed to himself and his wife.
The newspaper quotes tenant Sean Cook who deposited £600 with the former Town & Country lettings agency in Stourbridge when he moved into his property in 2013. The money was initially placed under a deposit protection scheme, but in 2016 Town & Country Property Services (Stourbridge) Ltd was taken over by Homepoint, and his money is no longer protected.
The newspaper continues: “In January this year Mr Cook received a letter from Moore insolvency telling him his deposit had not been secured with an appropriate deposit protection scheme, and that he would now have to pursue his claim with the liquidators. Mr Cook was also informed Homepoint’s client base had been transferred to a new company called Point to Home, which was being run by Mr Pooni’s wife Charnjit Kaur Sidhu. The new company is trading from Homepoint’s former office in Bridge Street, Walsall.”
Cook said he had tried to contact the new company by email, but had received no reply. He said Homepoint did not inform his landlord about the situation.
Our sister publication Letting Agent Today has attempted to secure a comment from Homepoint.
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It's a case of being very careful of who you are dealing with, check agents out the same as you would a tenant.
all of these amounts are chicken feed...
I had a similar problem with a company called Professional Lettings in Gosport. They didn't register the deposit and they with withheld in total 3 months rent. Liquidators were called in and insolvency meeting arranged. Through a little luck i obtained almost 100 landlords email addresses and tried to get an overview of the situation. Some landlords were owed around £5,000. In total it was around £250,000 plus deposits that this agency had secreted away. I was able to get the insolvency halted and had about 35 landlords onside to take action. I got the Police and trading standards involved. It was a lot of time and effort from me and another landlord who led the action. Trading standards pulled out stating not enough evidence, the Police tried to get a conviction but the prosecutors when they reviewed the case decided that it was too costly and not in the public interest.
I was told that the chap I dealt with was just an employee of the company, though acted like he owned it. He set up a handy man and a gardener to be the directors. I believed them when they told me that they had not received much from the company. The man whom had been the mastermind behind this had disappeared, however the Police did tell me that he was banned from owning a Limited company due to questionable practices in the past.
Though I cannot say all Agencies are like this I now self manage.
The sting in the tail is though the deposit was handed to Professional Tenant Finders they are not liable and the Landlords had to pay the deposit that they had not received back to the tenants.
Lesson learnt!
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