As a landlord, you’ll be aware of the initiatives in place to safeguard renters’ money, such as the tenancy deposit scheme. But what about your own hard earned cash that’s held by agents, is this protected?
For example, you may be paying an agent to manage your property as well as find tenants. It could mean you handing over thousands of pounds a year.
The money soon adds up, with letting agents believed to hold more than £2.7bn of landlords’ and tenants’ money in total, according to YouGov research.
It is important that landlords know that they can recover their funds if a rogue agent steals their cash or uses it fraudulently.
Client money protection scheme
There is one simple check that landlords can make to ensure their money is protected, and that’s to find out if their agent is a member of a so-called client money protection scheme or CMP.
This is where landlords - and tenants - can turn to if things go wrong.
The SAFEagent campaign suggests that at least one in five renters and landlords are not protected by CMP.
John Midgley, chair of the SAFEagent steering group, said: “If an agent were to steal landlord or tenant money without CMP in place there’s little chance of getting their money back.
“Would you use a travel agency who isn’t ABTA protected? Consumers who use agents without CMP in place are taking a massive risk. Who can afford to lose thousands of pounds?
“While we are finally getting closer to mandatory CMP, we aren’t there yet. It is so important that tenants and landlords understand that the right to redress only goes so far, and they need to choose their agent wisely by asking if they are part of a CMP scheme before signing on the dotted line.”
SAFEagent is campaigning for CMP to be mandatory for all agents. But until then, landlords can minimize the risk by looking out for a SAFEagent logo, which shows that an agent is subscribed to a CMP scheme. The logo will be displayed in an agent’s office or on their website.