New guidance on client money protection schemes
New guidelines on setting up client money protection schemes for the private rented sector have been unveiled by the government.
The advice is aimed at existing schemes and those considering setting up new ones, but the Ministry of Housing, Communities and Local Government says the guidelines will also be of interest to letting agents or property professionals “seeking to obtain client money protection from an approved scheme.”
The guidelines say client money protection schemes are intended to give landlords and tenants confidence that their money is safe when it is being handled by a letting agent or other property professionals, and where an agent is a member of a client money protection scheme, it enables a tenant, landlord or both to be compensated if all or part of their money is not repaid.
The document says: “The government is committed to making it mandatory that property agents in the private rented sector holding client money obtain membership of a client money protection scheme.
“A consultation on the implementation of mandatory client money protection was issued in November 2017 and the consultation response was published in April 2018.
“The government intends that these agents be required to obtain protection by April 1 2019.”
Client money protection schemes will be required to obtain approval from the Secretary of State for Housing, and the department says there will be a consistent minimum standard of protection for consumers.