Landlords and tenants: do you know if the rent and deposit your agent is holding for you is safe? Is it being held in a protected account or could your agent be using your money to help the cash flow of their business? Or to buy a new car or holiday?
Over the years there have been many horror stories of letting agents misusing their clients’ money, and in the worst cases going bust or running off with thousands of pounds of rents and deposits.
So what can you do to be certain your money is safe?
The answer is simple: choose an agent that is a member of SAFEagent. That way you can be sure they are part of a Client Money Protection (CMP) scheme which means the money they hold for their clients is protected.
As part of SAFEagent Awareness Week - which runs from 6th-10th June - Carole Charge, technical and compliance director at property specialist Leaders, answers four important questions to explain what client money protection is all about:
What is Client Money Protection?
Client Money Protection, also known as CMP, is an insured scheme through which tenants and landlords can seek recovery of their funds when misappropriation or fraud by an agent has taken place. If a lettings and management firm is part of a CMP scheme consumers are protected. Each scheme has its own scope and terms. You can ask your agent which scheme they are part of and obtain more details.
Do letting and management agents have to be a part of a CMP scheme?
No, it is not mandatory for agents to be covered under a CMP scheme which is why you should be cautious. However, it is a legal requirement for agents to display in their offices and on their websites whether or not they are part of a CMP Scheme so you can make an informed decision. If an agent is not part of a CMP scheme it is safer to avoid them.
What is SAFEagent?
SAFEagent – SAFEagent Fully Endorsed – is the easily identifiable mark denoting firms that protect landlords and tenants money through client money protection schemes. It is backed by industry and consumer organisations such as the Citizens Advice Bureau, The Property Ombudsman and the Trading Standards Institute. It has also received the support of the government since its launch five years ago.
Why should I choose a SAFEagent to let or rent through?
In addition to the reassurance that your money will be protected, any agent registered with SAFEagent will also belong to a regulatory organisation in the Private Rented Sector, ensuring that they meet defined standards of service and client accounting practices.
“Many people are still unaware of the importance of client money protection, and of the risks of using an agent that does not offer it,” says Carole. “Until it becomes mandatory for agents to be part of a CMP scheme it is up to landlords and tenants to look out for themselves.
“As long-standing members of the Association of Residential Letting Agents (ARLA), Leaders has always protected our clients’ money, maintaining separate designated client accounts to hold our clients’ money completely separate from the operating funds of our business. We are proud to display the SAFEagent logo clearly in our branches and company literature for our customers’ peace of mind.”
For advice you can trust on all aspects of renting or letting please contact your local Leaders branch.