Friday, November 8, 2024
Landlords and tenants sometimes find themselves in the position where the company they have been dealing with, sometimes for many years, suddenly stops trading, often leaving outstanding debts.
• rent which an agent has collected but not passed on to the landlord
• deposits received by the agent and not protected with a government approved tenancy deposit scheme
• any money belonging to you that the agent has not kept in a separate client account
If the company has been officially struck off the Companies House register, landlords and tenants are often left feeling powerless with no other options.
We receive numerous complaints from landlords and tenants who are owed money by an agent. When that agent has stopped trading during our process and is non-compliant with a decision we have made, they will be expelled from our scheme.
The directors shut up shop, owing money and believingthey can walk away without punishment[NP1] . They may intendsetting up a new company to continue trading clear of anyresponsibility from the old company which has been expelled by the PRS.
It can get complicated if the directors have applied andsucceeded in getting the company dissolved. Some[NP2] individualstry to hide their tracks and it can be difficult to trace them.
Limited companies can be removed from the register voluntarily or struck off by Companies House themselves
Companies House would normally only do this if the company had not presented their accounts, annual returns or responded to any communications.
What is not commonly known is that you can object to a company being struck off the register if you are a shareholder or another interested party, such as a creditor, and have a reason to stop the application. You may want to take legal advice and court action against the company and individuals for your money.
As part of our process, we now advise landlords and tenants in this position to contact Companies House to make sure the company has not already been struck off or dissolved. We know that doing this as early as possible in our process has meant success for some.
Informing Companies House that the company has taken money that should be in their client account is a serious allegation and if the evidence provided is persuasive, your objection will be accepted, and the company will remain on the register.
This will give you more time to take legal action in the courts against the company in question. It also makes it much harder for the directors to set up new companies.
Full guides and instructions can be found on the Government website here.
If the company has been dissolved, you have an option to apply to the court for an order to restore a company. This only applies in certain circumstances which include if:
· you did business with them
· you worked for them
· they owed you money when theywere dissolved
· you were a shareholder ordirector when it was dissolved
Where a company has not been dissolved, you could consider applying tothe courts to close or “wind up” thecompany if it is unable to pay its debts. This is known as compulsory liquidation, however, the company’s debts must be morethan £750.
If the application is successful, the company’s assets are sold, any legal disputes are settled, the company then collects any money it is owed and used to pay creditors.
This is an option worth considering if there are a number of other people in the same position who can join you in a class action, and where you are confident there are assets that can be secured and used to pay you.
Ultimately using client money to fulfil a company’s responsibilities or a director just keeping the money is a criminal offence.
However, the legal system is complex, which is why we strongly advise you carry out all possible checks on an agent before using their services and trusting them with any money.
