Mandatory Client Money Protection
A client’s money must be protected when in the hands of an Agent? This should be a statement of fact rather than a question.
I have had several professionals including a client recently discuss this with me. Client Money Protection insurance is what they are referring to and yes we as an agency have it. All responsible letting agents also have this and secondly as an ARLA Propertymark registered agency Regent Lettings Ltd has to have it!
Last Autumn a group were set up by the Department of Communities and Local Government to consider Client Money Protection and came to the conclusion this March that the ?scheme should be made compulsory for all letting agents that handle client money. Thank goodness for that and perhaps a little sense will now prevail in our industry? I have always been an advocate for all agents to be licenced which would include this requirement but the Government have been clear up to this point in saying that this was not within their consideration. The problem is that the consumer tends to assume that all agents act responsibly when holding customers and clients money but regrettably not all do and a Landlord or a tenant do not tend to find out until it is too late. We therefore shouldn’t be surprised that our industry benefits from not the best of reputations!
Client Money Protection (CMP) schemes protect the money of landlords and tenants in the event of a letting and management agent going into administration or embezzling the money whilst it is under their control. These monies are typically the tenants’ deposits and/or landlords’ rental payments but can also include monies held for repairs and maintenance to the property. I strongly recommend that all landlords and tenants check that their money will be protected before they either place their property with an agent or become a tenant.
At the end of March the Housing Minister accepted the recommendations to make CMP compulsory and so let’s hope that this law can come in via an amendment to the Housing and Planning Act and just as soon as the wheels of Government will allow…
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