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At last! Victory could be in sight for mandatory Client Money Protection campaigners
After years of well-documented cases as letting agents made off with clients’ money and after years of fruitless campaigning, mandatory Client Money Protection could finally become a possibility.
It has long been thought, within the industry, that one of the great scandals is that letting agents, who handle large amounts of rents and deposits, are not subject to the same regulation as estate agents – who handle no cash.
Now there is a breakthrough.
A broad coalition of 27 organisations is backing an amendment submitted to Parliament by ARLA managing director David Cox.
The amendment would be to the Housing and Planning Bill 2015.
Crucially, Cox had actually been asked by the Public Bill Committee, to which he gave evidence earlier this month, to propose the amendment.
In a preamble to the committee, Cox says: “It is estimated that letting agents currently hold approximately £2.7bn in client funds.
“If the agent is not covered by Client Money Protection, both landlord and tenant could lose their money.”
The amendment is brief.
It would make it illegal for letting agents to accept money from another person, in the course of lettings agency work, unless they had CMP.
The organisations backing the amendment including letting agents, homeless charities, landlord bodies, deposit protection and redress schemes, and law firms.
They include David Smith, of Anthony Gold Solicitors, who is telling MPs: “Client Money Protection is a badge of professionalism and provides much-needed security for all parties that their money is not going to be misused to fund an agent’s business or personal affairs.”
Other signatories include Crisis, which says: “We know that for people on low incomes, including homeless people, getting the money together to pay a rent deposit or letting fees is a huge challenge.
“For them to lose that money because an agent has shut down or misappropriated their funds can be disastrous.”
Shelter, Generation Rent, NALS, the RICS, NAEA, National Landlords Association, Residential Landlords Association and SAFEagent, together with The Property Ombudsman and Ombudsman Services, are among those also in support.
Agents backing the amendment cover the spectrum of sizes and include Savills, Your Move, Arnolds Keys, Kinleigh Folkard & Hayward, James Anderson, Jezzards and Alexandra Boyes.
