New Rules Announcement to Protect Renters Money
According to a new rule announced on 7th March 2019, private property managing agents now need to sign up for a scheme backed by the government.
This scheme is targeted at the money of the house owners and tenants.
The deadline for signing this agreement is the 1st of April 2019.
All agents that manage a private rented property and operate in England must join the scheme. That safeguards the money of both the landlords and renters.
The target of the scheme is to protect the money of landlords and renters from predatory agents if there is a theft.
If the agents go bankrupt while keeping the money of the landlords and tenants, the law also comes into action.
Any agents offering property management services that don’t sign up to the scheme can be fined as much as £30,000.
Letting agents are currently holding about £2.7 billion that belongs to the clients. Therefore, the new rules will protect this huge amount.
As a result of bankruptcy or misuse by agents, property owners and even tenants may currently be unable to get back their money from their agents.
The essence of this new rule is to further protect the money that is in the custody of the agents.
The rule stipulates that agents must sign up for a client money protection (CMP) scheme that has been approved.
This will make sure that landlords and tenants do not have to cater for any issues themselves.
When uninsured property managing agents suddenly go bankrupt or run away with their money.
With this rule, individuals are now reassured that their money is safe while keeping it with the agents.
Risk of Losing Renters Money
It is totally uncalled for that the failure of certain agents put their clients at the risk of losing out their money.
Although many agents are responsible, the new regulation will protect tenants and landlords from losing their money for something they are not responsible for.
The rule will ensure that house owners and renters have peace of mind and confidence that their money is safe while keeping it with their agents.
Currently, anyone can be a member of a client money protection (CPM) scheme voluntarily.
About 60% of agents join a scheme through any of the industry trading organizations.
As the membership of the scheme becomes mandatory, each agent will provide a similar level of security.
There are Five Approved Schemes to Protect Renters Money
All agents who are in charge of the money of their clients must join a scheme before 1st April 2019.
Independently, a working group wants to introduce a new regulatory framework as well as mandatory professional qualifications that all agents must have.
The framework will include an independent regulator and a Code of Practice.
All these activities from the government target curbing the few unscrupulous agents and improving the standards in the property agent industry.
With this, sellers, homebuyers and renters can have confidence that the charges and quality of professional they get are fair and great.
You can learn more about how these rules affect all parties by visiting Reneza. Contact us now!