Support, Advice and Experience within the Property Market

Government Announces Mandatory Money Protection – Robert Ulph

From admin on March 17, 2017

A Government Review was launched last Autumn to look at how letting agents manage their clients’ money and whether legislation was needed to make certain processes mandatory. Just last week it was announced that measures are to be put in place to make Client Money Protection mandatory for all letting agents across England.

Client Money Protection (CMP) provides landlords and tenants with protection in the event of a letting agent misappropriating funds. I, for one, welcome the review outcome as CMP has long been compulsory for licensed members of the industry body, ARLA Propertymark, which Pennington is part of and we are proud to have six in-house licenced ARLA Propertymark members.

I have written before about the large sums of money that letting agents hold for their clients and worryingly how some of this money is managed. For example, with any Assured Shorthold Tenancy the tenant’s deposit should be registered with one of three deposit schemes, within 30 days of the deposit being taken. But reports have uncovered evidence of deposits not being placed in deposit protection schemes and, when it is considered that letting agents currently hold approximately £2.7 billion in client funds, this is significant.

ARLA Propertymark has been significant in their lobbying on this matter, which I have given my full support to. It’s a campaign that’s taken over two years to come to fruition, but is a clear step forward towards a more regulated industry.

I have always taken the view that if we see any professional, an accountant or solicitor for example, for advice and use of their services, we expect them to adhere to a set of principles. So it seems baffling to me that we are expected to entrust one of our most valuable assets, our property, and often large amounts of cash to individuals, who can currently set up a letting agency with no qualifications, skills or experience at all and who are not expected to follow regulated procedures.

At the review outcome, Baroness Hayter, the peer who championed the measure said “the working group, chaired by Lord Palmer and myself, looked carefully at whether CMP should be mandatory for all agents handling client money. The evidence was overwhelming, and we recommended the government use its reserve powers to implement this. We are therefore delighted that the Government has accepted our recommendation as it will ensure tenants and landlords alike are provided with extra security in the lettings process.”

The best advice I can give is to get assistance from a professionally qualified agent, who is ARLA Propertymark licensed. You can check credentials on their website as all members, throughout the country, will be named on the site. By using a licensed agent, consumers have the peace of mind their agent will provide a professional service and adhere to industry standards.

If you would like any further discussion on this or anything else on the local property market, please do not hesitate to contact me.