1-in-5 Agents Have No Client Money Protect Scheme
An estimated 20 per cent of letting agents have still not signed up for a Client Money Protect scheme, six months after membership became mandatory.
The claim comes from Client Money Protect, one of six approved CMP schemes, which is working with the National Trading Standards Estate and Letting Agency Team to assess the scale of non-compliance.
“We act as the lead enforcement authority for the Tenant Fees Act. The team is working with the approved CMP schemes and local authorities to ensure that agents who are required to belong to a scheme are correctly registered with one of the six approved schemes” explains James Munro, Head of NTSELAT.
“We have arrangements with local authorities to refer cases for enforcement, and a backstop arrangement where we will take action in cases where a local authority cannot. With the support of the schemes, we are also proactively monitoring websites to ensure agents are clearly displaying their membership” he adds.
Client Money Protect says the reputation of the private rented sector, and letting agents in particular, is undermined by a small minority of unscrupulous agents who misappropriate money from their clients.
It says the industry is relying on reputable agents to educate clients on the fact that they have CMP, why is important to use an agent which has CMP, and how this might help them identify a rogue from a good operator.
Eddie Hooker, the chief executive of Hamilton Fraser, says: “The requirement for all letting and property management agents in the private rented sector in England to join a client money protection scheme has been heavily publicised, agents cannot hide behind ignorance as an excuse for non-compliance. Those who are not complying with their legal obligations under the Act could face a fine of up to £30,000, so we urge all agents to check that they are covered as a matter of urgency.
“We are currently turning applications around in 48 hours. If you already have membership, please ensure you are displaying your membership both in branch and on your website as you may also be liable for a £5,000 fine if you fail to do this. We have already taken a phone call from an agent this week who advised us that he had received a letter from NTSELAT. He is a member of Client Money Protect, but had not displayed his logo.”