An overwhelming majority of landlords believe Client Money Protection insurance should be made compulsory for letting agents, according to a small snapshot of the industry.
The survey, of 387 landlords, was carried out by Total Landlord Insurance.
Of the 85% of landlords who responded and said they use a letting agent, 81% believe CMP should be mandatory.
The Government has been conducting an industry-wide consultation on the issue.
Mandatory CMP could be made compulsory through the Housing and Planning Act 2016.
Industry estimates suggest UK letting agents hold approximately £2.7bn in client funds.
Did anyone ask us agents whether we feel that landlords should have similar insurance? Nope, thought not! Surely anyone, agent or landlord should insure equally?
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Landlords who keep the deposits would be required to used an insurance based system or the alternative custodial system so the deposits are protected. If you have a landlord who decides he is not going to do so he is in breach of the law and would not not be protected when trying to get possession under a S21 notice. Agents are required to comply with similar requirements as far as deposits are concerned. I think the point being made is to protect money where rents are paid directly to an agent and the agent then does a runner. Clearly a landlord receiving the rent directly this scenario would not apply. If an agent is a member of a plausible professional body such as the RICS client money protection is compulsory. So I am not sure why this should be an issue to reputable agents? I am always willing to learn if I am missing something here?
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As do the majority of agents. Who uses a Travel Agent before booking a holiday? Very few people I would guess; I know I certainly wouldn’t.
More media time should be spent on educating the public about what insurance a reputable agent should have. At the moment the sweeping generalisations appear to indicate that all agents are not insured and under regulated.
Now we all know that couldn’t be further from the truth.
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Let’s face it, like most surveys it was probably a leading question in order to gain something/anything for a press release, in which case it would be all the more surprising that only 81% of landlords surveyed said that they would like their money to be better protected.
I wonder if the survey asked if landlords would be willing to pay more to use a CMP licensed agent.
And also if the landlord knows whether or how their agents currently protect their clients monies ?
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