Mar

Minister criticised after letting agents given another year to comply with client money protection law

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Extension of grace period to April 1^st 2021 was voted through in parliament last night but Labour says this means landlord are at risk for longer.

The new housing minister
Chris Pincher has been criticised by Labour for giving letting agents another
year to get ready for the now legal requirement to comply with Client Money
Protection (CMP) regulations.

During a debate in
Parliament last night, shadow housing minister Alex Cunningham said the CMP
regulations were ‘vital to give landlords confidence that they money is safe’
but that allowing letting agents to have a further a further year’s grace to
comply left landlords unnecessarily at risk of fraud.

Last night MPs unanimously voted
through the government’s proposal to extend the grace period until 1^st
April 2021.

But letting agents were told
that this is their last chance to comply with the CMP regulations, which have
been a legal requirement for nearly a year now.

Compliance was then delayed
to give letting agents more time to set up ‘pooled’ client accounts for their
landlord and vendor customers to keep this cash separate from the turnover of
their business.

Most agents are now members
of a government-approved scheme but 251 say they are struggling to set up these
pooled client accounts and have now been given another year to do so.
As well as joining a CMP scheme, letting agents must display a certificate of
membership in their branch and on their website, produce a copy for a landlord
if requested to do so, notify clients within two weeks if their membership is
cancelled and tell clients the name and address of their CMP provider.

Agents face fines of £30,000
if they are not a member of a CMP scheme and can be fined £5,000 if they don’t
display their membership properly.

The regulations were
introduced to stop the small minority of agents who use landlords’ rental
income or deposits to prop up failing businesses, or simply steal it for
personal gain.

One recent example was
Premier Property Management in Truro, whose owners were jailed after defrauding
landlords and tenants to the tune of £266,000 over an eight-year period.Read
more about client money protection and what it means for landlords.

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