Date Published 08 June 2018
Any money paid to landlords through letting agents will now be protected after the government set out regulations that all agents must now hold any funds in a safeguarded scheme. Agents are estimated to hold £2.7 billion in payments (rental payments, money for repairs & maintenance).
Should something go wrong (the agent goes bust for instance) there is currently no law in place to protect that money & both landlord and tenant can be left out of pocket. Around 60% of agents are in the scheme voluntarily but the remainder of these offer no protection.
All property agents in England must be become members of the Client Money Protection scheme (CMP) by April 2019. This is to encourage regulations that should improve people's confidence in the private rental sector. Scotland & Wales have already imposed a compulsory membership of a client money protection scheme.
The CMP is a compensation scheme which will look after landlords & tenants should the agent misappropriate their rent, deposit or any other client funds. It is now a legal requirement for letting agents in England to display if they are a member of a CMP scheme or not. Agents found to be handling client money without CMP will receive heavy fines or be shut down.
Tenants deposits however, are protected under separate arrangements. Since 2017 it has been the law in England, Wales & Northern Ireland that your deposit must be protected in one of the 3 government approved tenancy deposit schemes. A landlord or agency must put a deposit into the DPS, My Deposits or The Deposit Service. Tenants are given a tenancy deposit protection certificate which includes a unique code to prove the money is legally put away.
Here at Marshall Property we're part of NALS (the National Approved Letting Scheme) meaning that we're covered by a CMP & our deposits always go into the DPS. You can have peace of mind when entrusting your money to us. You will always be protected. This reassurance is offered with the knowledge that NALS firms are covered by a CMP.