Protecting Clients' Money. Something needs to be done!
It is scandalous that some letting agents are able to get away with taking and holding onto deposits and other client monies, without belonging to any of the approved client money protection (CMP) schemes. The importance of this cannot be over-stated. Indeed there are instances almost every few weeks of someone somewhere absconding with client money.
Against this background, it is totally inexplicable that the Government has consistently refused to make belonging to an approved CMP scheme mandatory. Back in the Autumn, Housing Minister Brandon Lewis once again ruled it out, stating in response to a plea from within the industry that he had “no plans” to do so.
The only positive thing you can say about this is that it is at least consistent with the Government’s entire attitude towards the lettings sector. Within the property industry – at least, at the professional and ethical end of the spectrum - it has long been believed that one of the great scandals is that letting agents, who routinely handle large amounts of rents and deposits, are not subject to the same regulation as estate agents – who rarely handle any transaction money at all.
However, there is a possibility that things may finally be about to change – at least, on the particularly vexed question of CMP. Pressure is now really beginning to mount on the Government to make it mandatory. A broad coalition of major trade organisations is backing an amendment to the Housing and Planning Bill 2015, submitted to Parliament at the request of the Public Bill Committee by the managing director of the leading professional body ARLA (the Association of Residential Letting Agents). The amendment would make it illegal for letting agents to accept money from another person, in the course of lettings agency work, unless they had CMP. The organisations backing the amendment include letting agents, law firms, homeless charities like Shelter, landlord bodies, tenant lobbying groups such as Generation Rent, and deposit protection and redress schemes including The Property Ombudsman.
Will such a remarkable coalition win the day on this occasion? One can only hope. But, in the meantime, my best advice to any landlord is to ensure that the letting or management agent you deal with already belongs to one of the established schemes. Otherwise, you risk losing a great deal of money.
Paul Bonett F.N.A.E.A. M.A.R.L.A.