Ombudsman's decision-what next?

[buffalo747]

I'll try and keep this as brief as possible following a previous post I made in June last year following dis-instructing my LA who misused a tenants deposit (£1050.00) by returning it to him instead of following correct procedure.
As it happens, the tenant is no problem generally but he didn't forward the deposit to me although the rent is paid more or less on time.I reminded the tenant of this 2/3 months ago but haven't pushed it until the outcome of my complaint...He said it may have inadvertently been placed in an offshore savings term a/c!!!.....It's my guess he's spent it.
I initially complained to TDS but this was taken up by the OBE as the LA is a member of their scheme and at long last in receipt of the Ombudsman decision.

Complaints/Decisions I still have issue with:

1.The tenant moved into my property in Dec.2005....referencing of tenant and guarantor taken up but when I asked for evidence this was not forthcoming from the LA when I first took issue with them in June 2008.
The Ombudsman states in his case review that he has seen copies provided by the LA of referencing together with the tenancy agreement signed by the guarantor.
Q.Can I ask the OEA for copies of these documents but then again, would I have any recourse on the guarantor should the tenant default in any way if there is not a proper deed in place?
The Ombudsman says that he is precluded from dealing with this complaint because the LA wasn't a member of the OEA scheme until July 2006.
2.The LA failed to return checkout fee (£76.38) which the Ombudsman agrees should be returned.
3.The Ombudsman agrees the LA mishandled the deposit.

So, after all the time and aggravation this has caused, the Ombudsman is suggesting I accept a sum of £276.38 in full and final settlement of my claim against the L.A.....If I don't accept the decision by 19th.Feb or in exceptional circumstances make further representations, then the case will be closed and I will not receive a bean.The report mentions that should the tenant default on rent or if damage to the property occurs then court action against the tenant will be necessary.

To say I'm disappointed is an understatement, with my opinion the OEA scheme is only functional to protect their members.
I would have thought the LA should at least be asked to deposit the sum of £1050.00 equal to the amount returned to my tenant into my own DPS account until my tenant vacates in order to put a safeguard back in place.


Any expert advice/comments appreciated.....Bill

[Paul_f]

You have to make a complaint to the Ombudsman first because if you go to court instead the judge will ask if it has been referred to the OEA in the first place, and if not will advise you to do so, so you really don't have a lot of choice.

I can assure you that Chris Hamer the OEA is an extremely fair and neutral person and is entirely impartial. Just because he hasn't ruled entirely in your favour is not in any way biased towards the 'members'. It's not a club but has a legal requirement of selling estate agents to be members, and if they let property as well, they too are covered under the scheme. Only stand alone letting agents are not yet covered but will be required to be members sometime soon(ish!).

It's a form or arbitration and is free to the public but members have to pay an annual fee.

Accept the ruling and move on, unless you need to raise a lawful point that the OEA has failed to take into consideration in which case you will have to go to court, pay for a solicitor probably and you might lose.

[buffalo747]

Thank you Paul......I'm considering accepting Chris Hamer's determination and the pittance of £200.00 as an award for all the hours of time and trouble this has caused in proving my complaint justified, albeit in doing so will relinquish any claim I have against the LA for their incompetence which could potentially leave me £1000's out of pocket should the tenant default in any way.
Before I do accept though,I may take advice from a solicitor or welcome legal expert's opinions here of how I should proceed in taking the matter further, as I think not only has the LA acted illegally but the Ombudsman has failed in carrying out his proper duty by not awarding a more realistic figure and by not referring the matter to be dealt with by the courts once he established the LA acted illegally........I may be wrong but my point is this, if a landlord does not protect the tenants deposit correctly then if the case is proved in court, it could mean three times that amount being awarded against the landlord.
Likewise, Chris Hamer agrees the LA did not administer the deposit correctly although it's not the tenant who could be the loser in this case but potentially me.
I've assumed that once a deposit has been protected in any of the schemes then the money does not belong to either the tenant or landlord until both parties agree how the amount should be distributed.

Any comments appreciated....Bill

[Paul_f]

There was a case in Sheffield last August where a tenant tried to obtain compensation as the L failed to place the deposit within a recognised scheme within 14 days, although he did place it in a scheme. The judge said the wording in the regulations was open to interpretation therefore rejected the tenant's claim.

[buffalo747]

With all due respect Paul....The Sheffield case you mention has little bearing in this particular instance although I appreciate that should I choose to take the LA to court, what may appear to be a open and shut case could in fact go against.....However,now the Ombudsman has supported my complaint entirely regarding the mishandling of the deposit then the chances of my success seems more in my favour when taking into account the points I've previously mentioned and potential lose.
If Chris Hamer had made a more realistic award then I may have taken your advice and moved on but reading between the lines of his review and the relatively punitive amount suggested as compensation, he could indirectly be suggesting I take the matter further perhaps.
I could represent myself in court but if I engaged a solicitor could his fees be reclaimed if I'm successful and does anyone here know of one specializing in this area of law?


Bill

[Paul_f]

Only you can decide what should be your next course of action and I have no idea what might be the outcome if you should go to court! I have never instigated court action unless I was at least 95% sure of success. As a result I've always been awarded most of my claim, but didn't always recover it, which might be something to consider.

[buffalo747]

Thank you once again Paul......I do indeed take your point.
I'm waiting on solicitor's advice because there are a couple of points I'm unsure about.
Firstly,I'm reasonably sure in saying that if I make a claim through the small claims court for an amount of £5K or less then even if I'm successful, I can't claim my legal fees should I choose to be represented.
I've mentioned I could potentially lose out by several thousand pounds because of the LA's negligence but at present my only lose so far is the checkout fee.
It may not be in my interest to take legal action but I will wait and see if a solicitor thinks that by mishandling the deposit to which the Ombudsman has agreed would lead to 3 times the deposit amount awarded if my case is proved.

All I really want is the reinstatement of the buffer should the tenant default and some sort of punishment the LA deserves for the way he has treated me.

Regards....Bill

[Paul_f]

My point was that even if you obtain judgement, there is no guarantee that you will recover any monetary award.

[buffalo747]

Paul.....I appreciate there may not be any monetary compensation even if judgment was granted in my favour and all I can determine so far is that if a landlord was proved negligent with a tenants deposit then the tenant would be entitled to three times that amount......I've found nothing to suggest a LA would have to forfeit the same should he be proved negligent towards his client i.e. the landlord, although the consequences of his actions could be far more financially damaging than what a tenant may suffer......The point I'm trying to make here is that if the LA is acting as stakeholder then the deposit does not belong to either party until the end of the tenancy and would have thought the consequences of its mishandling would be the same.
From experience though, I only know too well what may seem only fair and logical may not always be when it comes to litigation!!
Although you mention Chris Hamer as fair person who takes a neutral approach when considering a case ( I'm not qualified to comment) what I can't get my head around is the OAE's approach should a member be found not complying with the OAE's code of practice....i.e.informal warning.....written warning.....cancellation of membership and as in my case a nominal award which in my opinion hardly comparable should a landlord be found negligent by the courts.
It makes me wonder if there is any real power or financial limit the Ombudsman can impose on members when you hear some of the stories of E/LA's misconduct.I'm implying this because if E/LA's were aware of certain penalties they may not become members in the first instance and are simply joining the scheme because a logo on their marketing details dupes the public into believing they are credible.
I'm not saying the OAE is not credible but there are many Federations that simply have little clout against their members.

Bill

[Paul_f]

Bill.

The Ombudsman can only make financial awards, and believe he has no power to terminate membership, but the OFT do have power to stop the agent trading. There is no chance of this given the circumstances. You wouldn't expect to be disqualified from driving for a minor traffic offence, but if you were guilty of death by dangerous driving then you are likely to be imprisoned, similarly an agent who defrauded somebody of a substantial amount would have a "stop" order made against their being able to trade within that field, and could be imprisoned for the most severe of cases. It's all relative.

I was hit by an uninsured driver who I believe was known to the owner of the vehicle. I broke my neck and spent 6 months in rehab and over 2 years obtaining compensation. I would like to have flogged the b****r within an inch of his life, but that's not how it works.

[buffalo747]

Paul.......Although the Ombudsman may not have the power to terminate membership he can refer the case to committee with certain recommendations.This could result in a formal written notice by OEA Ltd for the dismissal of Agent's membership but I have not suggested this is what should happen in this instance or that the Agent should be forced to stop trading.
Since my last message, I've established the Ombudsman can make awards up to £25K and when you consider he supports my complaint entirely regarding the misuse of the deposit,I consider an award of £200.00 against the Agent unfitting when compared to the consequences which could be imposed on a novice landlord should he make a very similar blunder.In my opinion, an Agent who has been vetted for membership by the OEA should face far stiffer penalties because he has already demonstrated he knows of correct procedure and should have known better.
Even if a genuine mistake ( we all make them) why not simply admit it, honesty is best policy I was always taught and if someone suffers because of your actions then surely this is the purpose of carrying indemnity insurance.

I'm sorry you had to suffer a personal injury through no fault of your own but likewise I'm equally aware how things work.It's more than 20 years ago now since I entered into litigation against an insurance company following structural defects with my property which I was covered for but they didn't accept liability of.After 6 years of hell I accepted a £25K out of court settlement plus costs and I was very bitter at the time because of the consequences this action had imposed during this time on my private life.............I wouldn't want to go through it again but on reflection the experience taught me an awful lot which has put me in good stead ever since.
This is probably why I'm finding it hard to accept Chris Hamer's decision, with him more or less saying either take an award of £200 or take your problem elsewhere.
If I did this, it would be going completely against the grain because I can't accept I've been treated fairly, although I appreciate some may take your advice and move on......Judge Pickles once said that you should only enter into litigation if it's a matter of " life or death" and the Ombudsman now saying to me "Deal or No Deal".

It's a good job I don't take life too seriously nowadays.

Bill

[Paul_f]

I think you will find the Ombudsman has never awarded anywhere near £25K, and if you ask his office it's probably nearer £3K, and only on the odd occasion. Their average award is probably about £500 but I may be wrong, and the number of cases where he find the agent at fault is low too!

If you do go to court I would be very interested to know the outcome, as would the Ombudsman no doubt!

[buffalo747]

Well, all I can say for the time being is thank you very much for your time and interest you have shown since I first took issue with the L/A last year.
I will of course inform you here of the final outcome once I've decided which route to take in bringing my complaint to a conclusion and can say at present I'm leaning towards telling the Ombudsman......." No Deal".

Best Regards....Bill