Letting industry breakthrough
Late last week, it was announced that all letting agents in the UK must, by law, be part of a Government approved Client Money Protection scheme (CMP). The new legislation, which will come into force next year, is a huge coup for the industry, and something we very much welcome.
Mandatory Client Money Protection schemes will protect the rental money that tenants transfer to letting agents who then pass it onto landlords. So, for example, if the agent is fraudulent or goes bankrupt, the monies in a CMP is secure and the tenant or landlord will not be affected. From April 1st 2019, if an agent doesn’t have in place an appropriate scheme, they can be fined up to £30,000 for non-compliance – an extremely hefty fine, underlining that any disregard or flouting of the new legislation will have serious consequences.
As a member of ARLA, we are thrilled that the Government has recognised how important it is to make Client Money Protection schemes law. We really do welcome the news as CMPs are vital in providing an honest and transparent service. Although we haven’t had to by law, we’ve been providing a protection scheme for our landlords and tenants since we established, and I’m pleased it’ll now be compulsory for every letting agent across the country to have one in place, both for the security of their tenants’ money and their landlords.
Money protection schemes play a key role in the industry because they help to drive out rogue letting agents, creating a fairer playing field for agents, landlords and tenants alike. I firmly believe this tighter regulation is the best solution to eradicating the unscrupulous traders who give genuine agents a bad name. Crucially, I think making CMPs mandatory will also raise the standards of service across the board, including the North East region, creating better working relationships between agents and landlords and higher quality home provision to tenants.
The compulsory legislation is a positive step forward because it’s important that agents take responsibility and step up to the mark of providing an efficient, 100% honest and secure service to both tenants and landlords. By protecting large sums of money, it not only improves agents’ reputation, but it also enables agents to become a pillar of trust and confidence in the market, demonstrating that whichever party you are – a tenant or landlord – you and your money are secure with your agent of choice.
If you’d like to know more about our current Client Money Protection scheme, how it works and what it entails, please do give me a call on 0191 284 7171 or email me: email@example.com