Government introduces greater protection from rogue lettings agents
The introduction of the client money protection scheme, similar to the tenants’ deposit scheme, follows a series of recent consultations exploring the enhanced regulation of property and lettings agents.
Tess Saunders, a solicitor specialising in property disputes at law firm Royds Withy King says: “We have come across a number of instances in recent years of rogue lettings agents unlawfully taking clients’ money, sometimes even dissolving the company and setting up a new agency in an attempt to avoid liability.
“A mandatory client money protection scheme is good news for tenants and landlords who will be able to recover money held by agents that could otherwise be lost through misappropriation or insolvency.”
Tess adds: “Whilst there are a number of schemes already in operation, they are entirely voluntary and only around 60% of agents, typically the larger businesses, have signed up to them. Now, all property and lettings agents who handle client money will be required to be a member of a scheme or face a fine of up to £30,000.”
A date for when the new scheme will start will be announced by the Government in the near future.
In addition to the client money protection scheme, the Government is also looking at a number of other proposals applying to residential agents including:
- A new code of practice setting minimum standards;
- Minimum qualifications and continued professional development for property and lettings agents; and
- An independent regulator to enforce the above.
Tess Saunders is available for interview.
For further information, please contact Tess Saunders on:
020 7583 2222 Email us
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