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The Residential Landlords Association is calling for the government to make Client Money Protection Schemes compulsory. This type of scheme protects landlords’ money when they use a letting agent, so if the agent goes into administration, the landlord does not lose their cash.
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Landlords Lose Money
Letting and property agents act as the middle man between a landlord and the tenant. The tenant typically pays the rent to the agent, who then passes it on to the landlord. Unfortunately, there have been several cases where the agent fails to pass on the money because they are having financial difficulties.
Government Working with House of Lords
A working group within the government and House of Lords is looking at how compulsory Client Money Protection schemes work. They will then decide whether to use the Housing and Planning Act 2016 to make such a scheme mandatory for letting and property agents, as it already is for solicitors and other bodies.
“Landlords should rightly be concerned about agents having control over monies rightly due to them and they should obviously be protected through a formal scheme,” says RLA.
“It is ironic that estate agents are legally required to be registered yet don’t handle money, yet agents handling tenant and landlord money are at present completely free to do what they like. This why we believe CMP schemes are an essential measure.”
