Winding up Petitions led to Letting Agency Directors Bans

Two directors from unrelated letting agencies, one in Hove and the other in North London, have been disqualified from acting as directors for failing to protect their customers’ money following two separate winding up petitions.

The first director, Peter Phillip Leonard (58), was the director of Direct Residential Lettings Limited in Hove until 10 June this year, when he gave an undertaking to the Secretary of State for Business, Innovation and Skills not to act as a director for 10 years.

Mr Leonard received the ban, which will prevent him from acting as a director of a limited company until 2025, for failing to properly protect the rental payments and tenant deposits he collected.

The Insolvency Service’s findings

Direct Residential Lettings Limited begun trading in 1997, but it was not until 2007, when he jointly purchased the company, that Mr Leonard became a director. After six years at the helm, the company was placed into compulsory liquidation on the petition of Mr Leonard as he was no longer able to pay the company’s debts.

Under his directorship, the company failed to comply with its statutory obligations and did not safeguard tenants’ deposits or rental payments in the proper way. The company also misled the National Approved Letting Scheme by submitting false accounting information to them from at least 2010 onwards.

The result was the accumulation of debts of at least £577,865 in the form of missing tenancy deposits and rental payments that were collected but had not been paid over to landlords. There were also transactions totalling £501,393 out of Direct Residential Lettings’ account which the Insolvency Service was unable to account for.

Welcoming the disqualification, Liesl Cook, the Official Receiver for Brighton and Croydon, said: “The public should be assured that the Insolvency Service will seek to disqualify the directors of companies that do not obey the law and use other people’s money for their own benefit.”

Six-year disqualification for North London director

David Philip Copestake (46), the director of the eponymous letting agency David Phillips, based in Highbury, has been disqualified from acting as a company director for six years for failing to protect tenant deposits.

Mr Copestake’s disqualification follows an investigation by the Insolvency Service which was initiated when the company entered liquidation on 15 March 2013. The investigation found that between January 2010 and February 2013, Mr Copestake held deposits on behalf of landlords without properly protecting them in the deposit protection scheme.

The company received £339,000 in deposits, but only protected £38,960 in the official scheme. When the letting agency entered liquidation it owed at least £595,091 to its creditors. Much of this sum was made up of tenants’ deposits which had not been repaid as they should have been at the end of the tenancy agreements.

A clear message to company directors

Commenting on the six-year disqualification handed down to the letting agency director, Mark Bruce, a Chief Investigator for the Insolvency Service, said: “The undertaking signed by Mr Copestake sends a clear message to other company directors.

The Housing Act 2004 places those who receive tenancy deposits under clear obligations to protect tenants and landlords from loss. If your company has failed and you have not taken your responsibilities as a director seriously, the Insolvency Service will investigate you and you could be removed from the business environment.”

We have seen the issue of not protecting clients deposits sufficiently and in some cases, there are perfectly legal solutions available. If you are concerned about this issue and facing creditor pressure call 08000 746 757 to access immediate help.

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