Lettings agents are being embroiled in another CMP nightmarish catch-22 that prevents them from complying with the looming requirement to open segregated client accounts, it has been claimed.
Kate Mutter-Brown of Client Money Protect (main pic), who runs one of the six approved scheme in the sector, says some banks and building societies are requiring agents to be members of a client money protection scheme before allowing agents to open a segregated client account.
“The problem is agents must have a client account before they can become a member of a client money protection (CMP) scheme,” she says.
After several grace period extensions, letting agents must have set up a segregated client money account by 1st April or face being expelled from their existing scheme.
These problems are the latest to beset letting agents, who have faced an uphill battle to comply with the mandatory requirement to set up segregated client accounts.
In the past, agents have been told such accounts would not be offered any longer and that instead they would have to set up individual accounts for each of their landlords.
Also, some banks have said will no longer offer client accounts of any kind to agents and have closed facilities without warning.
One of CMP’s clients, Symon Payne from Leeds firm Aireside Home Partnership, says the rug was abruptly pulled from under his business by long-standing banking provider, TSB.
“Last October, out of the blue, we received a letter from TSB advising us that they were closing our client accounts, as they were no longer offering that type of account,” he says.
“We rang other banks that we had previously dealt with, including Lloyds, HSBC, NatWest and Yorkshire, but all responded with words to the effect of ’we are not opening any types of client accounts at the moment’.
“After months of phone calls going back and forth with several banks, we’ve finally been able to open an account with Metro Bank. We pick up all the account details and cards next week. It has been a long and stressful journey.”
Agents who are still struggling to open client accounts can download Client Money Protect’s bank letter template here.