The let property industry was celebrating yesterday after the government agreed to make it mandatory for all lettings agents to put cash in Client Money Protection (CMP) accounts.
The change will mean that if any letting agent goes bust or makes off with the money, landlords (and their tenants) will be safe.
Only last week we reported how letting agents robbed over £1m from tenants' deposit schemes last year, so this new legislation will no doubt bring joy to the sector.
Under the new system, letting agents found to be handling client money without having CMP will face a fine of at least £5,000 – or could even get shut down.
A government working group, chaired by Labour shadow minister Baroness Hayter and Lib Dem Lord Palmer, looked at the existing tenancy deposit schemes and concluded that all agents handling client money will be obliged to have CMP.
Baroness Hayter said: “The evidence was overwhelming, and we recommended the government use its reserve powers to implement this. We are therefore delighted that the government has accepted our recommendation as it will ensure tenants and landlords alike are provided with extra security in the lettings process.”
Lord Bourne declared the move in the House of Lords, saying: "I'm pleased to announce that the government plans to make Client Money Protection mandatory in line with the recommendation of the review.
"This will ensure every agent is offering the same level of protection, giving tenants and landlords the financial protection they deserve."