We were instructed to act on behalf of the Insured and the Insurer.
The Insured were instructed on a let only service to find a tenant for the Claimant's property.
Prior to the commencement of the tenancy, the tenant arranged payment of 1 month's rent in advance along with the deposit via cheque. The Insured confirmed receipt of payment of the deposit monies and rent (which was showing as received on their accounts but not cleared) and the tenant was allowed to move into the Property. However, a few days into the tenancy, the cheque was returned to the Insured as unpaid, because the account that the monies had been paid from had been closed down before the cheque had been presented.
After the Insured advised the Claimant that the monies had not cleared, the Claimant changed the locks on the Property (against the advice of the Insured) preventing the tenant access; potentially, presenting the tenant with a claim for unlawful eviction.
The Insured were unfortunately at fault for failing to recognise that whilst monies were showing as received in their account they were not cleared funds; there was always a risk therefore that they would not clear.
The case highlights the importance of ensuring that monies are in fact cleared before allowing access to a Property. The legal process of recovering a property can be complicated, costly and time consuming.