A letting agent has gone into liquidation owing nearly £200,000.
A creditors’ meeting in Chester heard that Geoff Lavery, who had the Martin & Co franchise in the city, owed over £98,000 to landlords and tenants, and a further £86,000 to others, including Homelet and Rightmove.
Most of the money owed to clients is thought to have been tenants’ deposits, which may not have been covered by a tenancy deposit protection scheme.
The firm was a member of the National Approved Letting Scheme.
A second firm owned by Lavery, Three Counties Sales and Lettings, and understood to have run between May and July, has also ceased trading.
Lavery is now being investigated by Chester police. Detective Inspector Mike Beamish said: “This matter is under investigation and we are working very closely with the liquidators, Bridgestones. No charges or arrests have been made.”
Martin & Co’s chief executive, Ian Wilson, has obtained a High Court injunction which prevents Lavery from doing any lettings in the Chester area, and compelling him to hand over records and money.
Wilson admitted that there was little chance of the latter happening, as Lavery had chosen to put both his Martin & Co franchise and Three Counties Sales & Lettings into administration.
As a result, the liquidator, Jonathan Lord of Bridgestones, is holding company records.
Irregularities at Chester were uncovered by the Martin & Co head office management team during a spot check instigated because of problems uncovered at three other Martin & Co franchise businesses in Brighton, Rotherham and Tunbridge Wells.
The problems related to alleged misuse of tenants’ deposits and all three business owners were stripped of their franchises. Wilson has also revealed that at a fourth franchisee’s business, which he declined to identify, £150,000 worth of tenants’ deposits were found to have gone missing.
The Chester case is therefore the fifth where problems relating to tenants' money have been uncovered in the Martin & Co franchise network.
Of the Chester case, Wilson said: “Mr Lavery had been a manager in the NHS and there was absolutely nothing adverse about him to suggest any problems.”
He said that he was taken aback by the amount of the money owed, particularly to tenants: “However, the reality is that they will be able to claim this off their landlords, as the contract is between them.”
He was critical of NALS, which he claimed had failed to produce evidence of its client money protection scheme. He also said that NALS had continued to accept Lavery’s membership, but had apparently not examined his accounts. He also said that while NALS had suspended Lavery’s insurance once alerted, it had failed to put notices in the local Chester press to warn landlords and tenants.
NALS said it had suspended the firm’s membership in May.
Wilson said: “We are taking this matter extremely seriously. We have a full-time internal auditor and are putting our house in order. We are also talking to insurers about a bespoke scheme for all our franchisees, which would cover client money.
“However, I see no reason to change our recruitment policy. We have 170 independent businesses operating under our brand and are on target to recruit 40 more franchisees this year. We try our very best to check everyone out, but with the best will in the world, not everyone we recruit will be a winner.”
The Chester business is currently being looked after by Martin & Co franchisees Michael Edwards and Lee Bruce in Wrexham. A notice on the Chester Martin & Co website underlines the fact that the pair have a ring-fenced client account and client money protection insurance, and are both RICS members.
One of the people listed as a creditor is Lavery’s own solicitor, Peter Devine, of Devine and Co in Liverpool. He is owed £13,000 and said it was a “moot point” as to whether he was still acting for Lavery.
Another Martin & Co franchisee hits trouble
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Comments
Does anyone know where Graham Hill works now, as he departed company with Humphreys in Chester just before Christmas.
Is he still in the lettings industry?
You can find him at his home below
Name & Registered Office:
LETTINGS MADE EASY LTD
9 BRYN CELYN
MOSS
WREXHAM
ENGLAND
LL11 6EJ
07779103939 - FOR THOSE WANTING TO CONTACT GRAHAM HILL.
good luck with getting your deposit back, I left my property in JULY 11 and i still didnt fet my deposit back towards the end of august after asking a number of times, he said he would send a cheque in the post or put the money in cash into my account, and it never happened, i went up to the office towards the end of august, went in and demanded my deposit, he wrote me out a cheque, i thought it would bounce so i took it to a cheque cashing place in wrexham and they cashed it, I wreckon it bounced as i think they are looking for him also. I now have a problem with my gas from my old company, and the company are saying i owe them over a grand, for the year i lived in the bedsit, and the gas company are trying to find him also as he told them i was still living there! very annoyed so if anyone could let me know a contact number for him, i would very much like it
Graham Hill has been running Lettings made easy in Wrexham where I rented my house through him. For the first 3 months I recived my rent upto 1 month late.
Then in September I went to his office to find out where my August payment was I found the office empty. I checked with the DPS and was told that my deposit had never been registered with them. For the last 2 months I have been trying to get my rent from Mr Hill and dispite being promissed it on a number of occasions I still have not received payment. He is now working for Humphreys of Chester
does anyone have any info on graham hill who took over the wrexham franchise of martin and co and then seems to have given it up and reverted to 'lettings made easy'?
Can only back up the comments posted by Bluebell. 4 months after posting my claim with NALS, they are still stalling in terms of writing back to me. I've spoken to their Ops director who is verbally telling me that my claim won't be met but is currently unwilling to committ into writng to lay out NALS reasoning. Their basic line is that they terminated their agreement with Lavery at start of May and therefore won't look at claims after this time. All whilst ignoring the fact that they took no measures to inform landlords and tenants that cover was withdrawn and that Lavery had not lodged any deposits into a secured account for almost 3 years. Whatever happened to the requirement to submit sudited accoutns for NALS membership??
What's the point of having a national registration scheme if rogue agencies can get away with abusing the system and the regstration bodies won't or aren't able to fulfill their duties??
The Chester saga is still not over; in fact, Cheshire police say there is so far no proof that Lavery committed fraud (where is the missing £200,000 then?, Ian Wilson has been worse than useless dealing with irate landlords, Lavery was not with NALS for months before the franchise went belly-up so landlords are being held responsible for tenants deposits as well as having rents stolen by Geoff Lavery who has got away with fraud and so has his business partner wife - Anne McGarry. The pair, plus Ian Wilson and all at Martin and Co make me sick!
Rich and James- what I can't understand is why you have a franchise unkown outside the industry, so no commercial advanatage to you at all, quite the reverse with such stories?
What a scumbag
No, didn't get past line three, too bored with same old same old...
Busy Agent - you obviously had enough time to read it!
Matt Wales, how much time do you have on your hands?
Dear "How Clean is your agent?", AKA Martin & Co. As alike to another comment from someone else in this article, I am always bemused how the guilty try to soften the blow by incinuating that loads of other agents are doing the same thing. Using client funds is a crime. It's called fraud. Those committing it probably know it. An agent in our town closed down last year under the same circumstances, and I believe that one of the partners was convicted of a number of counts of fraud.
I would like to think that most businessmen and women running a letting agency have integrity and a sense of what is lawful and comply with regulations to the letter as do I. I do however agree that if the government is not going to offer more security to landlords under Deposit Protection in such events, then the procedures must be further tightened, perhaps taking control of deposit funds away from agents. Some landlords have suffered badly as a result of deposit protection. Before it, they used to hold the deposit themselves, but with the addition of regulation that scares most private landlords away from holding the deposit, they end up having to dig into their own pockets when the agent acts inappropriately and loses the deposit they are supposed to be securing.
Prior to deposit protection, my company had never had a court dispute with a tenant regarding deductions from deposits. Now the scheme is there, tenants seem to take advantage of it in order to try their luck at getting the disputed sum back when they know full well it's fair, simply because there's no cost in doing so as all they have to do is fill in a form! We as agents must comply with rigorous time constraints, otherwise (as we have witnessed) we lose all rights under the scheme, without question. We had one incident where we missed protecting a deposit when an old tenancy was renewed and the results were that we were completely precluded from making any claim against the tenant under our scheme. Further, there was the added threat of the "three times monthly rent" fine. However, we had just one dispute with TDSL last year which took them six months to resolve, yes, 6 MONTHS. And all they would tell us is that their charter to resolve disputes within 28 days is "at their best endeavours".
Deposit Protection is great when applied properly, but the government has presented a half hearted, protection lacking, mess of an attempt to properly protect tenants and landlords and as a result, I belive we are no better off.
How is the lettings industry supposed to be organised and effective if from the top down (Government), there is no effective organisation and regulation?
I own a Martin & Co franchise that has been trading for 7 months and have read all the comments posted. Myself and my business partner welcome any inspection or audit, we use the DPS and are trading (like 98% of the Martin & Co network) exactly as we should be. It would be a shame if hardworking people like us, who have put hard earned savings into opening our own business were tarnished by the actions of a few. I can say that Martin & Co conduct regular spot checks of our client accounts and they have an internal auditing department working flat out to try and ensure this doesn't happen again. In our opinion the governing bodies and government should be working together to eradicate this issue from the industry. As far as we are concerned taking money that isn't yours is illegal and should be dealt with as such.
I was ripped off by a Belvoir franchisee in Birmingham.
(At least Martin & Co have been honest about the problems)
Belvoir could only post a message on the telephone system of the failed business, basically saying the fraud was nothing to do with them. (01214344744)
Seems to me that Martin & Co are on top of things and making sure that their house is in order. I have it on good authority that my local office has been audited twice in the last 3 months. They also are ARLA Licenced and Bonded and hold Client money protection.
This seems to be a small percentage of Martin & Co offices. The majority seem to operate professionally.
How many independant agents abuse clients money that we dont know about or other larger chains for that matter too.
Regulations wont stop people taking client money.
It would seem to me that the main difference between Martin and Co and the other letting companies is that they have been at least direct and upfront in their dealings with what I suspect is an industry wide problem. I am advised from a source I trust that there is another franchised group who have had a similar whopping great hole at a large branch in the Midlands, but have expended a great deal of energy keeping it largely out of the news. In my town, we have also seen a couple of other letting franchises offices fold, so its not all about Martin&Co, though I expect their closest competitors will understandably try and exploit it.
Other agents rubbing their hands with glee at this news need to be very sure that their own house is in order - and be prepared to prove it. I see from the article that this problem came to light because Martin and Co do at least audit their agents, which at least is some protection, and are at least doing something about it, albeit closing the stable door after some of the horses have already bolted. Landlords using private letting firms and tenants using private landlords are probably much more at risk of their money going astray. Although the burden of lost deposits falls on landlords (as their legal obligation to tenants), it sounds like in this instance it was covered by the insurance required by NALS and Martin&Co, and therefore much of the lost money will be recovered and repaid to landlords and tenants. Most agents in my local town don't even have this insurance, which is a worry......
The legal framework that we have does not work in practice. I would be in favour of tenants having to pay their deposits direct to the deposit holding company - its the only safe way to ensure that a greedy or inept agent or landlord doesn't pocket it.
It's actually £21,000 for a franchise.
It seems clear to me, Martin & Co are good at getting people to join them as a franchisee and also good at collecting the whopping £18000.00 each time they do,and even better at checking that each person also makes the 9% monthly fee to them on their earnings, this is where their man power goes, making sure the Martin & Co bank balance swells. the company had got too big and we all know large companies end up alays giving poor service. Ian Wilson sounds very much like he somehow forgot that he and his team are in fact the Franchisor, meaning thay oversee the franchisees including picking them in the first place, perhaps they should count the deposit monies held instead of the 9% fees which when you consider is coimg in from each person/offic eits were theit time is surely spent.
All deposits have to be registered. If the agent holds the deposit it cant be difficult to evidence that the amount registered tallies with the amount on deposit in the agents client account. ARLA members jump through hoops at audit time. This needs to be addressed before clients money protection becomes unaffordable.
I have been following the Martin & Co saga with bemused astonishment ever since it began - including as commented on elsewhere the "explosion" of offices which is clearly too much for their systems to handle and in part the root of their problem. What is really a disgrace is Ian Wilson's 'smoke and mirrors' defence of blaming the deposit scheme which he has always criticised and NALS. He is wasted in property and really should be in politics with his spinning abilities (or the England cricket team) as he seeks to blame everyone but himself. The problem here is the lack of auditing and controls over the franchisees and the simple fact is that several (so far) Martin & Co franchisees are rotten apples in an obviously too big a barrel and are simply not fit to handle other people's money. The problem Mr Wilson is not the deposit scheme - it is your franchisee's ability to use it and above all handle other people's money honestly. The comment on the awards won is choice - wonder whether Martin & Co will be exhibiting at the upcoming franchise exhibition at the NEC - or whether the BFA will disown them too!!
They continue to expand and a recent new recruit for Scotland commented in an advertorial that she was not in the slightest worried by these events and was sure that other lettings agents do the same - really?
What controls do Martin &Co have over their Franchisees then?
Obviously not enough and a good reason to not deal with them.
I recall that a couple of weeks ago, Martin & Co won an award and were named the best national agent in some publication, might have even been here! It's funny how things change almost overnight.
I'm quite sure that Martin & Co's thousands of landlords will be pleased to hear Mr Wilson's comments that tenants shouldn't worry because ultimately the landlords will have to cough up for the money his company has lost. Perhaps Mr Wilson should consider repaying the landlords out of his own pocket for missing deposits, using some of the undoubted huge profits he's made through the Martin & Co franchise explosion!
Good going Martin & Co. In an industry where we're all trying to improve standards and integrity, thanks for dragging us back through the mud once more. And finally, could someone please remind me what Deposit Protection is supposed to mean? Is the government not supposed to protect deposits? Should it not "do exactly what it says on the tin"? Would someone in the government kindly create a scheme that works and doesn't cause the honest and decent agents far more aggravation, simply because of the activities of greedy landlords and agents? I live in hope, but I'm not holding my breath!
So, it seems yet another 'quango type' organisation has failed in its objectives.
As an Estate & Lettings Agent for over 35 years my firm joined every consumer 'protection organisation' going - including NALS. What a waste of time and money -no longer a member.
The fact is that there is a requirement to register deposits, but unless you are a member of ARLA, RICS or NAEA, who knows whether the money is where it should be? There are many agents in this situation. They have complied with the TDS and registered a deposit - but the scheme has no method of checking to see if the funds are actually there. Believe me, within a year or so, this will be big news. All some 'professional' bodies require is an accountants letter - not even an audit! I have seen agents accounts at companies house where they show a loss of a few hundred thousand, no monies owed, no capital investment on the balance sheet - so where has the trading loss been paid for? Obvious stuff. The TDS need to start auditing its members - all they need is a copy of a bank statement where the balance matches the amount of deposits registered. Simples!
I no longer deal with lettings but am somewhat bemused and horrified the Mr Wilson of the franchisor company is having to put their "own house in order". I was under the impression that there was a legal requirement to belong to a deposit protection scheme or am I missing a point? What are Trading standards doing?
Agreed Rich... The sooner all Agents STOP Joining, Stop Paying & Stand Up And Face What May Come... the system WILL FAIL US, THE PEOPLE, EVERYONE!!! This Country Has NO BACK-BONE - And That's Why We'er In DEEP TROUBLE...!
oh so what is the point of regulation? Banks were highly regulated and look what happened to them.
These 'bodies' are no better then Hip company's, just leach off us successful businesses, take our money and have no control over members.They even serve up propaganda to the press like the old 'anyone can set up an estate agent'.