Leamington letting agency wound up over rent debts

Telmark Properties, formerly Smarter Housing, repeatedly breached agreements with both landlords and tenants and failed to deal properly with its tenants’ deposits.

The company was wound up on public interest grounds after an investigation by the Insolvency Service.

Company investigations supervisor Chris Mayhew said: “Money that should have been protected was instead used to fund this company’s business.

“Student tenants who could least afford to have their money unfairly withheld and who believed their rent deposits were secure, suffered as a result.”

The company was incorporated in July 2005 with the name Smarter Housing. Registered in Althorpe Street, Leamington, it changed its name to Telmark Properties Limited in August 2010.

Grounds for winding up the company were that it failed to protect deposits received from tenants in accordance with an authorised scheme, it failed to collect and or pay rent totalling at least £204,346 to landlords, failed to file accounts and annual returns, failed to maintain proper accounts and present these to the investigator, was insolvent and had been abandoned, having effectively ceased to trade in August 2010.

The petition to wind up the company in the public interest was presented in the High Court on March 21.

The company did not oppose the petition and was wound up on June 29.

In ordering the company into liquidation Ms Registrar Barber said: “There is cogent evidence of systematic failure by the company to protect deposits as required by the Housing Act and further that deposits were unlawfully used to fund ongoing trading.

“The company has sought to mislead landlords and this is a window into the other evidence before me, which is uncontested.

“In my judgment it is appropriate for the company to be wound up on grounds of public interest.”

Boss’s account of how his company failed

SMARTER Housing’s founder says not a single student was left out of pocket when his company went out of business.

Adam Arnold, himself a Warwick University graduate, described how he set up the company in 2005 to provide only the nicest properties, all-inclusive bills and no letting fees.

He said the company grew rapidly and by September 2008 was managing nearly 300 student properties in Coventry and Leamington.

But the wheels became loose when the breakdown of his marriage left Mr Arnold unable to manage the company for several months, and when he returned the firm’s accounts were in turmoil.

Mr Arnold said that by July 2010 two full time staff had resigned. With nobody else to run the office he returned to work and compiled rent accounts showing tenants owed almost £200,000 over a period of 18 months.

He feels the final blow came when Warwick University students union contacted students stating they should not pay rent to Smarter Housing under any circumstances.

While he accepts this made sense from a student welfare perspective, and no students were left out of pocket, Mr Arnold said landlords did lose out, and he could only issue them with a breakdown of what was due.

And although he says some landlords have recovered a proportion of their losses, others are still significantly out of pocket - a situation he believes could have been avoided if he had been able to collect rent.

Mr Arnold disputes whether it was in the public interest to wind the company up, and denies that he acted dishonestly.

He said: “I don’t know how much it cost the Insolvency Service or Dickinson Dees to prepare the documents used against Smarter Housing, although I suspect it wasn’t cheap. All company bank statements, cheque books and rent accounts were provided for the investigation and it was clear that there had been a massive accounting failure and huge amounts of rent were outstanding.

“It was also clear that I hadn’t swindled the money out of the company or simply spent it.

The cost of bringing the case to a close will increase further as the Official Receiver tries to deal with the various debtors and creditors.”