A letting agency in Somerset has been ordered to pay a £8,000 fine for failing to protect clients’ money.
The fine was handed to Swallows Property Ltd, of Frome, by Heart of the South West Trading Standards after the company repeatedly ignored the service’s advice to obtain client money protection, which safeguards landlords’ and tenants’ money held by the agency.
The business appealed the fine to the First Tier Regulatory Chamber, which this month upheld the sanction.
As agents will know, all letting agents and property managers in the private rented sector who handle money on behalf of their clients are legally required by The Client Money Protection Schemes for Property Agents Regulations 2019 to belong to one of the six prescribed client money protection schemes. It protects landlords’ and tenants’ money in the event of the insolvency of the agent.
Following several warnings by Trading Standards, Swallows Property Ltd was fined for not obtaining scheme membership.
In its judgement, the tribunal pointed out that the client money protection law serves a crucial purpose of protecting consumers and that professional practitioners must be assumed to be aware of the law that regulates their activities and have a duty to keep themselves up to date on their legal obligations.
Ben Newell, business support and innovation manager at the Heart of the South West Trading Standards Service, said letting agents must be aware of their legal obligation to protect clients’ money.
He commented: “This case issues a clear warning to those involved in letting agency and property management to ensure they are part of one of the six approved schemes and to make sure that their certificates are accurately displayed.”
Daily news email from EYE
Enter your email below to receive the latest news each morning direct to your inbox.