Government Support for TDS Member Letting Agents over use of Client Money Protection Insurance

Although Housing Minister Grant Shapps has ruled out compulsory Clients’ Money Protection for letting agents in the foreseeable future, the Tenancy Deposit Scheme, TDS, today welcomed government support for its members.

A huge 98% of the Scheme’s members are letting agents who have separate clients’ money accounts that are safeguarded through their membership of the industry organisations, the Association of Residential Lettings Agents, the National Association of Estate Agents, Royal Institution of Chartered Surveyors, the National Approved Letting Scheme and the Law Society.

The self-regulation imposed on members of these organisations has been praised by the Government in a letter to the Chief Executive of ARLA and the NAEA it was revealed this week. The letter points out that Government “Always suggests that anyone considering using a letting agent checks to see that they belong to a trade body or accreditation scheme.”

Steve Harriott, Chief Executive of the Tenancy Deposit Scheme, said, “Tenants and landlords must check the agent has client money protection insurance. This provides the assurance that they will be giving their deposits and rents to a properly regulated agent. At TDS, we now refuse letting agents as members of our scheme unless we are sure that they belong to the industry organisations that insist on clients’ money protection.

“We have taken the view that unregulated agents are too risky for us to work with because of our bad experiences where a small but significant number have gone bust taking all their clients’ money with them,” he added.

Steve Harriott welcomed the government’s vote of confidence in the industry’s self- regulation but stressed the importance of all regulated letting agents promoting the benefits of membership of their own regulatory body and of the Tenancy Deposit Scheme.

“Some unregulated letting agents are going out of business and simply stealing landlords’ and tenants’ money when they go down.  In the absence of government regulation, landlords and tenants are well advised to shop around and make sure that their agent is a member of one of the recognised schemes that offer client money protection insurance.”

10th August 2011

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