Client money protection to be debated in parliament

Mandatory client money protection will now be reviewed by the government as part of an amendment to the Housing and Planning Bill last week after continued efforts by Lord Palmer and Baroness Hayter. The amendment means that the government needs to review if agents should be required to be a member of a client money protection scheme. For agents, this would also include keeping any client money in separate client money accounts.

Housing minister Brandon Lewis had previously ruled out the introduction of mandatory client money protection, most recently in his speech at the ARLA conference in April, saying that he did not want to introduce more regulation at this time.

Lord Palmer and Baroness Hayter succeeded in having the amendment added after continued and constructive discussions with ministers.

Lord Palmer, a member of the Property Redress Scheme (PRS) advisory council, says: “Client money protection would be one more step towards a more regulated property industry, safeguarding the interests of consumers and giving them the guarantee that their money is safe. As a member of the PRS advisory council, I am delighted that the amendment has been added to the Bill and hope that the government will see that this is a further important aspect of protecting consumers from rogue letting agents.”

Wales led the way to more regulation recently and introduced the Rent Smart Wales scheme, which requires all letting agents to register with the Licensing Authority. Part of the criteria for registration is the membership of a client money protection scheme, alongside Professional Indemnity insurance and membership of a consumer redress scheme like the PRS. The PRS actually offers a product bundle for letting agents, which includes all of the above at a discounted price.

For more information, please call the PRS on 0333 321 9418 and quote ‘Letting Agent Bundle’.