Mandatory money protection is in place to protect landlords and tenants, so it is saddening to see another local case going through the courts where an agent closed their business, with £80,000 owing to their clients
As reported in this paper, the owner of Smart Residential Letting Agents in Newmarket recently pleaded guilty to two counts in respect of retaining rent and deposits after Suffolk Trading Standards investigated the company following complaints. Some individuals have been left being owed up to £8,000 as the money was not placed in deposit protection schemes which are in place to prevent this very issue from happening.
Since April 2019, all letting agents handling client money have been legally required to hold valid Client Money Protection (CMP) scheme membership and abide by the regulations involved in this.
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. This is a significant piece of regulation as letting agents hold around £3.5 billion in clients’ funds at any time, so protection against fraud and misuse, as well as against slapdash practices, is paramount.
There are very strict – and clear – regulations that govern client money protection and an example is they prescribe that a tenant’s deposit should be registered with an accredited deposit scheme, within 30 days of the deposit being taken.
Throughout the legislative process, Propertymark was significant in their lobbying on this, which I gave my full support to. It’s a campaign that took over two years to come to fruition and it was a clear step forward towards a more regulated industry. CMP was always mandatory for Propertymark members, but when it became a requirement, all letting agents were to be operating on a level playing field and consumers should have been protected regardless of which agent they chose.
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 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. Certificates should be available and displayed which show that your money is protected by the Propertymark Client Money Protection Scheme and that you can claim back money lost in the event of your letting agent going into administration or misusing your funds.
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 have been affected by this and need any advice or would like to discuss any other matters on the local property market, please do not hesitate to contact me.
