Letting agent done a runner

Tenancy Deposits

We are a managing agent and last year we directed a landlord to a letting agent to do a 'let only' then we took over the managment. All good, seemed a reputable agent, High St shop - I had known this guy from another agency for a number of years.

We have since found out that the agency has closed and the owner has gone with a significant amount of rent and some deposits, that he had stated in the tenancy agreement had been lodged with the DPS - but it appears now it hasn't as I have checked with them and there is no record of it. So the poor tenant (who is disabled) can't get his deposit back.

where do we go from here? does the landlord or tenant have any recourse?