The Property Ombudsman is actively looking at the twin issues of lettings agents that are currently not required by law to maintain separate client accounts, and that cannot get client money protection insurance.
Christopher Hamer was speaking after we asked him about the Guardian’s poll on whether the rented sector is working – the poll having not raised the crucial issue of agents and their handling of client money.
Agents who do not subscribe to the TPO or who are not members of trade or professional bodies, have no obligation to keep client money separate. Nor can agents who are outside membership bodies have access to CMP insurance.
Hamer said: “Regardless of whether the letting agent is a member of TPO, the issue which was not specifically highlighted in The Guardian’s poll is the protection of client money if the firm goes bust or the proprietor uses it for his own purposes.
“Tenants in many European countries are protected under law and, in the UK, NALS, ARLA and RICS also require separate client accounts. However, it remains the case that firms not so affiliated are free of that obligation.
“We recognise this is a matter of importance and we are actively considering what opportunities may be available for providing cover to non-affiliated firms.”