From Robert Ulph on August 6, 2021
Every so often the Client Money Protection (CMP) scheme, which became a legal obligation over two years ago, comes under the spotlight when agents breach the regulations.
Most recently, seven different agents, the majority of which are now in liquidation, have been excluded from The Property Ombudsman (TPO) for failing to pay compensatory awards. One of these agents had outstanding awards totalling £215,000.
Since April 2019 agents handling client money have been legally required to hold valid CMP scheme membership and adhere to the legislation. CMP has long been compulsory for licensed members of the industry body, Propertymark, which Pennington is part of, and the scheme exists to protect landlords and tenants in how agents look after their money. The TPO ensures fair resolution for compensation and disputes and allow the CMP schemes to protect against fraud and misuse, as well as slapdash practices. This means that the tenant’s deposit should be registered with an accredited deposit scheme, within 30 days of the deposit being taken.
When it is considered that letting agents hold approximately £2.7 billion in client funds, this is significant and worrying to see that agents continue to operate in unscrupulous ways. The recent cases brought by TPO underlines the importance of CMP as the body is increasingly acting against agents that do not comply.
It is easy to check agents’ credentials as they must display a valid certificate in-branch and online and they must also provide their client money handling procedures both online and hard copy, making it available to clients free of charge upon request.
I cannot stress enough how important it is to have this protection for your money. While these recent cases have been carried out in other parts of the country, we have had previous cases locally where agents have gone into liquidation and significant amounts of deposit money have been found to be missing.
I am a long-term supporter of this kind of regulation across our industry and I welcome the increased focus from TPO. 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, Regulation for agents who are entrusted with property and such significant amounts of money too, is obvious to me.
The best advice I can give is to get assistance from a professionally qualified agent, who is 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, landlords and tenants will have the peace of mind their agent will provide a professional service and adhere to industry standards, giving protection for the property and all money associated with it.
If you need any advice on this or would like to discuss any other matters on the local property market, please do not hesitate to contact me.