National Approved Letting Scheme chief executive Isobel Thompson has reiterated her backing for industry-wide compulsory Client Money Protection as Peers prepare to deliver their working group review.
Government representatives told the NALS conference in London yesterday that the working group on mandatory CMP would deliver a report to the housing minister by the end of the year.
Thompson said 3,000 offices had signed up to the voluntary SAFEagent, designed to show the public which agents sign up to a CMP scheme.
She told EYE: “I don’t know if CMP becomes mandatory if that means the end of our SAFEagent campaign.
“It would be tricky for the Government to ban lettings fees while also saying agents have to pay for CMP.”
Comments (11)
Happy to talk – Call me 07584304816
Happy to talk Robert. Call me 07584304816
Took me a while to read but it was worth it! Well writtten IV70!
Unfortunately, the industry is always at risk of bad agents; the trade press confirms that to us. CMP and trade body membership does not stop someone from taking money – the trade press also confirms that to us. It is simply there to tackle the problem when it occurs.
I do so wish that your statement Robert, about agents currently owning CMP through trade bodies being immune to problems as they have had their accounts signed off by an accountant, as ringing true but it is far from that.
All the claims associated with agents with CMP will have had an accountants certificate so where is it going wrong? This demonstrates that ‘anyone’ including the crooks can buy CMP currently and not necessarily via Lonsdale. Incidentally, do you think that the trade bodies considered their agents, who have claimed on the CMP policies, to be crook agents when they took their subs?
(By the way – have you asked Lonsdale how their scheme operates and do you know that they don’t do any audits?)
We have two topics here being discussed – 1) should the consumer be protected by knowing they have an agent holding CMP and 2) should agents be allowed to join a scheme if they are not ‘audited’ with accounts ‘signed off’, once per year, by an accountant.
I’m not sure how many audits of lettings client accounting you have undertaken but reconciliation seems to be the furthest things from a lot of agents minds – including those who have CMP AND an accountants certificate. How many client deposit bank accounts balance to the penny with their deposit protection scheme records? (Of course the ones who do balance may refute this claim and the others will remain embarrassingly silent)
Audit is great but how many agents are there now operating in England and Wales and how many audits are happening across these each year in total by all the bodies? An audit is a bit like a reference or an MOT – it is only really valid on the day it takes place and even then some slip through the net!
The industry has become very big, far too quickly and money is sloshing around in thousands of accounts across the country (client accounts and those which are not client accounts….). One step to ‘help’ the situation would be to remove some of the temptation from these potentially ‘crook agents’ and lessen the burden on the CMP claims in the future. How? Get the Tenant’s to pay their deposits directly to a custodial scheme so that the money doesn’t even stand the risk of never reaching its final destination. Those trips to the bank via the travel agents or bookmakers will be eliminated. Ok, I know that isn’t everyone but I am always amazed how agents run a client account full of other peoples money – it isn’t a loan account.
That leaves the daily client account with rents. Landlords are always quoted as being in business and therefore should have an eye on what is happening with their rental money. Personally, if I didn’t get 1 rental payment I would be onto the agent and telling the Tenant to pay me instead. CMP & PI cover purchased by agents could very well be suitable for all (agents) and the amount of ‘auditing’ required and risk could be halved over night.
Don’t forget that in 12 – 18 months a lot of agents will be losing their pin money from fees which pay anything from staff wages to the Rightmove subscription. Let’s hope the client account and the deposit accounts don’t start to shine like a beacon on those ‘cash flow light’ months ahead. Thank goodness for CMP policies – all of them.
The trade associations ought to be the one in the dock when a member is allowed to steal any more than 1 months rent role. I will happily and openly discuss this with whoever you can find to disagree with me and who has been responsible for the safe keeping of quite as much Client cash as I have.
So why are the vast majority of CMP claims from trade body members who have received a so called audit? Sounds like the audit is not fit for purpose to me and another convenient way to cash in!
The audit process that is easily bypassed by a spreadsheet that represents the client cash account isn’t fit for purpose. CMP ought only be available through firms who are checking full bank reconciliation month by month and replicating GAAP.
It is too easy to belong to a trade association, I get asked to look at client accounts that are out of balance. Some trade association including law society turn an understanding blind eye to issues with accounts, some firms I have been to have not passed an audit for 3 years.
Providing CMP insurance to anyone who’ll buy it will simply exacerbate problems.
CMP without meaningful, regular and audited bank reconciliation is mad. CMP needs to be provided by someone who is taking responsibility for the loss, someone who is checking Client cash accounts are being run correctly.
Allowing crooks to buy insurance to cover their thieving is a nonsense and lowers the barrier to entry down to the very lowest denominator, whoever is happy to nick the premium for the insurance.
CMP insurance without reconciliation and audit is unnecessarily more expensive than it needs to be.
Safe agent does not recognise all CMP schemes and therefore defeats the object it is trying to achieve. It feels like it is solely there to encourage agents to join trade bodies to access CMP and in doing so taking two bites of the cherry. I’m not sure it feels desperately fair for agents who do not necessarily want to form part of a trade body.
Wholeheartedly agree Oliver, we’ll be speaking soon for your unattached scheme 😉
Hi Oliver, I echo your sentiment. We have client money protection, through your organisation that’s recommended by the TPO and yet Safe Agent won’t recognise it. I’ve had numerous discussions with them and it is evident that it is purely a vehicle to promote a few profit making trade bodies.