One of the big scandals in the property industry has been the unregulated nature of the lettings industry.
Gradually things are getting done.
Last year saw new rules making it mandatory for all letting agents to belong to a Property Redress Scheme and earlier this year new regulations came into force regarding transparency of letting agents fees.
However, the big issue is protection of clients money. Such as rent and deposit money.
Speaking as someone who until a few years ago practised as a solicitor, I have long been horrified by this.
As a solicitor,
- I was required to keep all clients money in a special ‘client account’.
- I was required to submit an accountants’ report annually to the Solicitors Regulation Authority and
- I had to carry special solicitors professional indemnity insurance.
All this was quite expensive – and I rarely had more than a few hundred quid in it!
However letting agents routinely hold thousands and thousands of pounds of other people’s money with no requirement for any form of protection whatsoever.
Meaning that we regularly hear horror stories about agents running off with client money or going out of business taking their customers money down with them – having spent it on their own debts.
This is wholly unacceptable and it is extraordinary that it has taken such a long time for something to be done about it.
So I was delighted to learn via the ever informative Property Industry Eye that David Cox of ARLA has been asked to submit an amendment to the Housing and Planning Bill 2015 to deal with this issue.
I have not seen the amendments but it is apparently very short, and simply makes it illegal for letting agents to accept money from another person, in the course of lettings agency work, unless they have client money protection insurance.
I really hope this makes it onto the statute book.
Nick Salmon of Property Industry Eye has now set up a petition calling for CMP to be made compulsory for all letting agents.
To show your support click here