A guide to Client Money Protection and tenant deposits
One of the reasons why we’re a trusted lettings agency in Southend is because of our professional association memberships which ensure we operate to the highest standards.
What is SAFE?
Pace is a SAFE agent, which stands for Safe Agent Fully Endorsed. This is a mark awarded to firms that protect landlords and tenants money through client money protection schemes. Clients’ money is any money received and held by an agent that does not belong to it. This could include rent held on behalf of a landlord or a tenant’s deposit. As members of ARLA (the Association of Residential Lettings Agents) we are part of their Client Money Protection scheme (CMP).
What is client money protection?
The ARLA Client Money Protection Scheme is an insurance policy that protects landlord and tenant clients of an ARLA member lettings agency against theft of their money, by a principal, partner, director or shareholder of the agent. The protection is only provided for members that have been approved by ARLA for membership of the Client Money Protection Scheme and only whilst the agent remains a member of ARLA. Not all SAFE agents will be members of ARLA but all SAFE Agents will have CMP. Choosing an ARLA agent also gives you additional protection which we will write about soon.
While all lettings agents in Southend and indeed throughout the country are legally obliged to keep tenant’s deposits safe, not all have client money protection. If an agent without CMP ceases trading, any money the agent has collected on behalf of their clients and not yet paid over to the landlord such as deposits or rent, will be lost.
Even if you use an agent stating it has a separate client money bank account, if they do not have CMP and they cease trading if there is no money in the client account, you will not be able to get your money back.
Being part of a CMP scheme gives our clients confidence in dealing with us. It shows we are professional, reputable and working to strict standards. It is a significant benefit being able to offer our clients protection of their money, something not all agents can offer.
I thought deposits were protected anyway?
When an agent holds a deposit on your behalf, they are supposed to register it with one of the government approved schemes – the TDS, DPS and others. Many landlords do not check that the deposit has been properly registered. We have seen firsthand examples of many agents going out of business and the deposits are just not where they are supposed to be.
If they are not there, they are not protected – unless you have an agent with Client Money Protection that is ideally also a licensed ARLA Agent.
We are happy to offer half an hour of face-to-face advice, free of charge, to local individual considering becoming a landlord.
Please telephone and ask to speak to Martin, Marcus or Crystal on 01702 445 606.