Where someone holds money for a tenant, (e.g. an agent holding a tenant’s deposit or a landlord’s rent) they need compulsory Client Money Protection. This means the money is properly secured in a formal ‘client’ bank account and does not ‘belong’ to the agent.
The reason this is important is letting agents handle huge amounts of other peoples’ money. As all the rent and deposits can add up – in our case we manage over £6m of other peoples’ money every year. There have been many examples of agents stealing this money leaving landlords without rent and tenants without their deposit.
You can be reassured we have had Client Money Protection place for many years and are checked at least annually to ensure it is all where it should be!
Another change is letting agents will need to be licenced. To achieve this they will need to hold formal qualifications and follow defined codes of conduct. This is a welcome change as currently anyone can set up as a letting agent.
A letting agent is the formal legal agent of the landlord, therefore whatever they do is in the landlords name. There have been examples of some landlords left with some expensive problems caused by their unqualified agents. There are so many rules to follow on behalf of landlords. It is essential agents act properly.
As we have more qualified staff than anyone locally we hope this change will not a particular challenge for us!