Client Money Protection for Agents Set to be Mandatory

Published on Wed, 6th Jun 2018 15:14

It has been announced that all property agents will need to belong to a recognised scheme that protects their clients money.

Details can be seen here, but in summary:-

  • Client money means money received by a property agent in the course of English letting agency work within the meaning of section 54 of the Housing and Planning Act 2016 or English property agency work within the meaning of section 55 of that Act and held on behalf of another person.
    A letting agent means a person who engages in letting agency work (whether or not that person engages in other work). It doesn’t include staff who work for a letting agent so only the letting agent company (or individual) requires the client money protection.

    “Letting agency work” means things done by a person in the course of a business in response to instructions received from—

    • a person (“a prospective landlord”) seeking to find another person to whom to let housing, or
    • a person (“a prospective tenant”) seeking to find housing to rent.

    But, letting agency work does not include all of the following things (as long as nothing else is done by the letting agent):

    • publishing advertisements or disseminating information;
    • providing a means by which a prospective landlord or a prospective tenant can, in response to an advertisement or dissemination of information, make direct contact with a prospective tenant or a prospective landlord;
    • providing a means by which a prospective landlord and a prospective tenant can communicate directly with each other.

    Property manager and property management work means things done by a person in the course of a business in response to instructions received from another person (“the client”) where—

    • the client wishes the person to arrange services, repairs, maintenance, improvements or insurance in respect of, or to deal with any other aspect of the management of, premises on the client’s behalf, and
    • the premises consist of housing in England let under a tenancy.

    “Property agent” means a letting agent or property manager