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Client Money Protection amendments

Safe Agent logoIn the House of Lords the debate has been raging about Client Money Protection.

Lord Monroe Palmer imageLord Monroe Palmer (left) who proposed the changes to the Housing Bill wrote, “The Government has back-pedalled and tenants have won.”

“The Housing Bill has continued in its long worn out path through the Lords. The Liberal Democrats have been battling to make changes to a Bill which will currently only worsen the housing crisis, reducing the availability of housing and moving the first rung of the housing ladder even further out of reach.

“Across the past fortnight, the Government has been forced to back pedal on a number of measures. This week they made a significant concession on protections for tenants at the hands of rogue letting agents. An amendment with my name on it had been put forward which ensured that money belonging to tenants for use as holding fees, deposits, rent, or service charges by letting agents, was protected. 20 per cent of the letting agent sector does not have protection for client money.

“The amendment we put down was targeted at protecting the fifth of the industry in which tenants and landlords remain at risk. People risk losing their money if a letting agent goes bust or if the money goes walkabout in a liquidation. Client money protection will be mandatory in Wales from November. All letting agents will be required to apply for a licence and part of the application process is showing that they have professional indemnity insurance and client money protection insurance and are a member of a redress scheme. If the Welsh can do it, I am glad to see that the English are following.

“The change we have won from the Government is another small change to an extensive 200 page Bill, but is an important one. It is a distinctive Amendment in that the Government have accepted our amendment on Client Money Protection and it cannot be overturned in The Commons. Renters have gained more rights against unscrupulous letting agents looking to exploit their clients and the trust placed in them.”

David Cox, Managing Director, ARLA, welcomed the amendment.

“This is positive news for consumers and a great example of the industry and policy makers working together to champion consumer interests. At present, property agents are not legally required to join client money protection (CMP) schemes which leaves tenants and landlords at risk of losing money.

“This new measure means that when Government reviews its property transparency measures later this year, there is a real chance that CMP could finally become mandatory for all property agents in the UK. Consumers may finally have a guarantee that their money is safe and we will continue to work alongside DCLG to make this a reality.”

Rogue agents have had their hand in the till for too long

However, John Midgley SAFEagent campaign chair cautions against shouting victory on Client Money Protection (CMP) for all lettings and management agents following last night’s House of Lords amendment to the Housing and Planning Bill.

“At SAFEagent, we won’t be settling for anything less than full and mandatory CMP which protects landlords and tenants from the worst practice in letting agency. It remains to be seen whether the amendment makes it through the full Parliamentary process, and only last week the Government seemed hell-bent on not budging on CMP.

“Enough is enough. The consumer needs this protection and so we say again: all the industry bodies involved in CMP, plus tenancy deposit organisations, need to publish how much cash has been paid out when tenant and landlord money has been stolen or used fraudulently. The Government needs to fully appreciate the scale of the challenge. Rogue agents have had their hand in the till for too long.”

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