Another major organisation within the private rental sector has thrown its weight behind mandatory Client Money Protection for letting agents in the wake of the launch of a government consultation on the subject.
The Association of Residential Letting Agents is the latest group to express its support for CMP being mandatory. ARLA joins NALS and the RLA that have already come out in favour of the proposal along with the organisation that has been campaigning for it for some years, SAFEagent.
“CMP is an entirely sensible measure that protects both the landlord and tenant in the unlikely event that an agent goes into administration or misappropriates a client’s funds” says ARLA managing director David Cox.
“We’ve been calling for the launch of this review for some time so we are very pleased that it has now been announced. It provides an extra, but essential, degree of security for professionals in the industry as letting agents currently hold approximately £2.7 billion in client funds. It’s really important for members, and the wider industry, to come together as one clear, loud voice to call for full, mandatory CMP through this consultation” says Cox.
On Monday the government launched a six week consultation period - closing on October 3 - with an open letter from housing minister Gavin Barwell saying letting agents currently hold approximately £2.7 billion in client funds “but if a letting agent is not covered by client money protection, both the landlord and tenant could stand to lose their money.”
It goes on to say that currently between 60 and 80 per cent of letting agents voluntarily pay a membership fee of £300 to £500 to join a client money protection scheme and this forms part of a central pot of money that can then be used to pay successful claims by landlords and tenants.