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RLA Backs Client Money Protection Bid

Sally Walmsley
Written by Sally Walmsley

The Residential Landlords Association is backing an amendment to the Housing and Planning Bill, proposed by ARLA (Association of Residential Letting Agents) to protect money received from clients and held by agents, such as rent due to landlords.

The Residential Landlords Association is backing an amendment to the Housing and Planning Bill, proposed by ARLA (Association of Residential Letting Agents) to protect money received from clients and held by agents, such as rent due to landlords.

The purpose of the amendment is to require letting agents in England to have a protection system in place for monies received by them in the course of their business from tenants, prospective tenants or any other person who is renting accommodation or seeking accommodation to rent.

It is estimated that letting agents currently hold approximately £2.7 billion in client funds and yet, if a letting agent is not covered by client money protection, both the landlord and tenant could stand to lose their money. The amendment is designed to protect both parties in the event that an agent goes into administration or misappropriates client funds, as any losses incurred through the actions of the letting agent can be covered.

David Cox, Managing Director of ARLA, said

“The Client Money Protection scheme is fundamental for tenants and landlords to ensure that they have peace of mind should an agent go bust or take off with their funds. Last year’s move for all letting agents and property management agents in England to be a member of an approved redress scheme is a welcome step but essentially is worthless without a Client Money Protection scheme in place to ensure that, if necessary, we can cover losses for both the landlord and tenants.”

RLA Chairman, Alan Ward, added

“A clear and recognisable brand will help build confidence with landlords as well as tenants who place large sums of money on trust with professional letting and management agents. It will place the onus on agents operating without CMP to answer the question “why not?”

About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Magazine and Digital Editor for the NRLA. With 20 years’ experience writing for regional and national newspapers and magazines she is responsible for editing our members' magazine 'Property', producing our articles for our news site, the weekly and monthly bulletins and editorial content for our media partners.

2 Comments

  • As landlords with just one property we are having problems with a tenant we want to leave (she wants to be rehoused as family has grown) the council won’t do anything unless we evict her.
    Our agent has disappeared as has her deposit, we have been told that if we pay her the deposit, serve a Section 21 again then go down the eviction route that will work. In the meantime our flat is going downhill rapidly, she is not a good tenant.

    My point is as landlords, we must have proof that the deposit is held in a neutral account, especially for inexperienced landlords like us.

    Nova Bailey

  • Excellent Idea! There are too many unreputable letting agents around with no recourse to them if something goes wrong. It’s about time they were held accountable. It also helps the reputable ones as the overall image of agents goes down when something goes wrong.

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