Robert Bolwell, partner and head of the Landlord and Tenant department made the following statement to the House of Commons this week. They are looking into compulsory client money protection for letting agents.
"A recurring problem which our landlord and tenant team has come across since the advent of the Housing Act 1988 is the inability of consumers - both landlords and tenants - to appreciate that monies paid to a letting agent are not always held in a secure or nominated client account. Sadly, this has led in recent times to consumers suffering significant losses in the event of a letting agent going out of business. It is not appreciated by the majority of landlord and tenants that deposit registration is not a panacea in such circumstances and can often give rise to a false sense of security. These issues would be more than adequately addressed by the introduction of a compulsory client money protection scheme such as the schemes which are mandated for many other professionals including solicitors and accountants."