Letting agents are urging landlords to make sure they only do business with firms offering a money protection scheme.
Firms signed up to the SAFEagent scheme are highlighting that landlords and tenants risk losing thousands of pounds in rents and deposits if an agent outside a money protection scheme shuts.
The most recent firm to go bust in Canterbury owes landlords and tenants more than £410,000.
Receivers have warned creditors are unlikely to see any of their cash.
Had the firm belonged to a client money protection scheme like SAFEagent, the scheme would have repaid the missing money.
This week is SAFEagent Awareness Week with letting agents across the UK encouraging landlords to check that the firms managing their properties belong to the scheme or other similar schemes run by other self-regulated organisations in the industry, like the Association of Residential letting Agents (ARLA).
Carole Charge, a director of one of the UK’s largest letting agents, Leaders, said: “Having set standards of best practice in lettings over the last 29 years, we are well recognised within the industry for our financial probity and are pleased to be members of SAFEagent and to promote SAFEagent Awareness Week.
“However, we would also like the public to be aware that being a trustworthy letting agent is about more than just protecting client money. A letting agent should also be experienced, knowledgeable and competent to let and manage property with a thorough understanding of the complex legislation surrounding letting.”
Despite pleas from the Property Ombudsman, ARLA and other industry groups, Housing Minister Grant Shapps has confirmed the government has no plans to regulate letting agents.
Leaders explained that protecting client money was only part of regulating letting agents.
“You also need to be sure that your agent will let the property safely, comply with all the legislation and protect your interests as a landlord or tenant during your tenancy,” said Charge.
“Getting it wrong can have dire consequences for landlords, including huge legal expenses, loss of rent, financial penalties and even custodial sentences for not complying with legislation.”