Housing Minister cans requirement for Client Money ProtectionMake Text Bigger
The Housing minister, Brandon Lewis, opposed a clause in the new Housing and Planning Bill that would have required all letting agents to carry Client Money Protection insurance.
Teresa Pearce, Labour MP for Erith and Thamesmead, who proposed the clause indicating that there was industry support said,”The new clause is designed to protect both parties in the unlikely event that an agent goes into administration or misappropriates the client’s funds. Any losses could be recovered through the scheme.”
Mr Lewis countered saying “We want to ensure that we have a strong and thriving private rented sector that is not tied up in excessive regulation.
“Requiring agents to pay to belong to a client money protection scheme would force honest agents to buy insurance against the risk that they themselves were fraudulent, when, as the hon. Lady said, the vast majority of agencies are not.
“Introducing a mandatory Client Money Protection scheme at this point would be a step too far and would overburden a market that is perfectly capable of self-regulation.
“However, in May 2016 we will review the impact of the transparency measures that were put in place only recently.
“At that stage, I will take due consideration of whether any further action is needed, and obviously I will take into account the comments made this afternoon. I hope that, with those points in mind, the hon. Lady will withdraw the new Clause.”
The subsequent withdrawal of this clause has already been criticised by ARLA and their MD David Cox said, “It’s very disappointing the amendment requiring all letting agents to have Client Money Protection has not been successful especially when so many organisations from across the industry were supportive.
“However, we are pleased the minister has agreed to review the issue again in May.
“We should not be disheartened as it is a positive step that Client Money Protection is now firmly on politician’s radars and being discussed at the highest levels of Government. ARLA will continue to fight for mandatory Client Money Protection as a step on the road to a more appropriately regulated lettings industry.”
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