Trading Standards is reminding letting agents of their legal obligation to protect money they are holding on behalf of a client after a tribunal upheld an £8,000 fine imposed on a firm.
Heart of the South West Trading Standards imposed the fine on Swallows Property Ltd in Frome, Somerset, after it had repeatedly ignored advice to obtain Client Money Protection.
The business appealed against the fine to the First Tier Regulatory Chamber. This month the Chamber rejected the appeal and upheld the fine, meaning the company will have to pay.
The Client Money Protection Schemes for Property Agents Regulations 2019 place a legal requirement on all letting agents and property managers in the private rented sector, who handle their money on behalf of their clients, to belong to one of the six prescribed CMP schemes.
Having identified that Swallows Property Ltd. did not have the required scheme membership, Trading Standards says it advised the trader and made repeated efforts to encourage it to obtain the protection.
However, scheme membership was not obtained and in May 2022 Trading Standards issued the fine.
In the judgement, released this week, the Tribunal pointed out that the Client Money Protection law serves a crucial purpose of protecting consumers – and that professional practitioners must be assumed to be aware of the law that regulates their activities and have a duty to keep themselves up to date on their legal obligations.
The maximum penalty that can be issued to a Letting Agent or Property Manager who handles client monies and fail to belong to Client Money Protection scheme is £30,000.
A failure to display their certificate on their website and in their office could also lead to a hefty £5,000 fine.
A spokesperson for Trading Standards says: “This case issues a clear warning to those involved in letting agency and property management to ensure that they are part of one of the six approved Schemes and to make sure that their certificates are accurately displayed.”