From Robert Ulph on March 26, 2021
The importance of having Client Money Protection in place has been highlighted once again after a London agent has been fined £20,000 for being in breach of regulations.
The agent was among over 100 being investigated in the capital for not belonging to a CMP scheme, even though since April 2019 agents handling client money have been legally required to hold valid CMP scheme membership.
CMP has long been compulsory for licensed members of the industry body, ARLA Propertymark, which Pennington is part of, and the scheme exists to protect landlords and tenants in how agents look after their money. This involves protection against fraud and misuse, as well as slapdash practices and 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 without the proper legislation in place.
The recent cases brought by Trading Standards underlines the importance of CMP as the body is increasingly acting against agents that do not comply. The case of the agent fined £20,000 had started the CMP application process but the regulations mean that any business must have CMP in place before starting to trade.
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 investigations have been carried out in London, we have had 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 on CMP from Trading Standards. 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 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, 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.