Client Money Protection (CMP) could become compulsory in a matter of weeks after the Secretary of State was given the power to implement further regulations yesterday, meaning added protection for both tenants and landlords when handing money over to letting agents.
Letting agents and property managers in England who are not already members of approved Client Money Protection schemes, such as the National Approved Letting Scheme (NALS) or ARLA Propertymark, could be obliged by law to join one as soon as 1 April 2018, and are being urged to act now.
At present, many letting agents already subscribe to such schemes, which protect the money of landlords and tenants – including rental payments collected by agents or property managers, tenancy deposits, and funds held to be used for repairs and maintenance. CMP schemes prevent theft or misappropriation of funds, and they are already compulsory in Scotland and Wales.
More Security for Landlords and Tenants
Tim Frome, associate director at insurance company Hamilton Fraser – the administrator of Client Money Protect – said: “After being heavily involved in the two consultations to date, I am delighted that the government appears to be following Scotland and Wales in moving quickly to make membership of a client money protection scheme compulsory for letting agents in England. With key provisions in place, the groundwork has been laid for CMP regulations to be introduced, the details of which are likely to be unveiled in April when most regulations appear.”
Agents and property managers who fail to comply once CMP becomes compulsory are likely to face fines, which will be charged by local authorities or trading standards, but exact details of how the system will work have not yet been published.
More changes are afoot for letting agents as the draft Tenant Fees Bill is expected to bring in a ban on letting agency fees for tenants from next year, leading to many landlords and tenants opting to cut out the middle-man and self-manage their properties instead, to offset any increase in charges that may come from letting agents as they try to recoup their costs once the changes come in.
Source: AppraisalNewsCast which is a real estate news blog.