There has been an increase in letting agents failing and leaving client accounts overdrawn or in some cases absconding with clients’ rent and deposits altogether something that has been well documented by the property trade press. And, whilst on 6 April 2007 the Government introduced measures to ensure that tenants’ deposits are protected through a registered Tenancy Deposit Scheme, little else has been accomplished by way of regulation to ensure that rents are also protected.
If an agent does not have insurance in place to protect their clients’ money (Client Money Protection), neither the landlords nor tenants are able to recover missing funds, which can easily amount to thousands of pounds.
Although the operators of letting agents’ Client Money Protection Schemes (NALS, ARLA and RICS) have made strenuous efforts to get the message across to consumers that they should choose an agent who can give them financial peace of mind, it has proved difficult to alert consumers to the risk. Sadly, only when it is too late and consumers find that there is no cover do they realise they should have checked their agent at the outset.
This led a representative group of letting agents’ CEO’s to tackle the issue themselves to protect consumers and show that the few unscrupulous operators who exploit tenants and landlords should no longer be able to tarnish the reputation of those who act in a wholly professional and responsible way.
The SAFE initiative’s founding agents approached the NALS Industry Forum to devise the campaign to offer a single kitemark to identify agents with Client Money Protection insurance in place, and to raise awareness of the risks of using an uninsured agent. If an agent does not display the new kitemark consumers will be told that they are potentially at risk.
The founders have used their industry experience to offer practical support to the launch as well as financing the initiative and NALS has agreed to co-ordinate and administer the SAFE campaign.
The kitemark will be available for use by all agents in current Client Money Protection schemes and will be free for agents to register, with only a nominal charge being for marketing materials.
Since launching to the industry a few weeks ago, the response has been superb and this simple, straightforward kitemark has already garnered support from organisations across the property industry.
We believe having the backing of industry bodies will help enormously to galvanise the sector into demonstrating its commitment to best practice and protect consumers and landlords from those unscrupulous agents. We also anticipate that ultimately we will get Government recognition for this new mark.
Christopher Hamer, The Property Ombudsman says of the initiative,
“Reducing the number of disputes and disadvantaged consumers must be a prime aim and anything which helps landlords find an agent who is committed to a high standard of service, and to protection of client funds has to be seen as positive.
“For agents it must be an advantage to be able to confirm to the public that they have a secure approach to holding client money.”
Whilst Alan Ward, Chairman of the Residential Landlords Association, focused on the benefits of consumer confidence that the kitemark offers;
“A clear and recognisable brand will help build confidence with landlords as well as tenants, who place large sums of money on trust with professional letting and management agents. It will place the onus on the agents operating without Client Money Protection insurance to answer the question, ‘why not?’”
Support for SAFE continues to go from strength to strength and only this week, Trading Standards Institute (TSI) Chief Executive, Ron Gainsford, confirmed that the TSI is fully supportive of the campaign, welcoming the introduction and promotion of a single mark to identify letting agents who are in Client Money Protection insurance schemes.
“Raising the money for a deposit and rent places a great financial strain on many people who wish to rent property and it will be invaluable to have one mark that can be promoted as the sign on the door that their money will be safe with that letting agent.
“Having just one mark will increase recall levels of the scheme and enable consumers to make sensible and safe choices of letting agents based on a raised awareness of the Client Protection Insurance scheme. In turn this will help trading standards services in the fight to reduce the number of rogue and ‘uninsured’ letting agents who disappear with consumer money.”
Registering as a SAFE agent will be a simple online process which, in conjunction with the Client Money Protection providers who operate in the Private Rented Sector, confirms whether the agent is covered by a Client Money Protection scheme.
Details a firm will need to provide include the name of the Client Money Protection scheme the firm is signed up to, the renewal date for the scheme and the industry organisation that the firm is part of.
The SAFE agent kitemark is a ‘home grown’ initiative that is being driven by some of the best-known lettings agencies in the industry, including: Belvoir Franchising, Bushells, Foxtons, Northwood Franchising, Touchstone, Winkworth and Young London.
Any agent interested in knowing more about the campaign to establish the SAFE kitemark can follow @safeagent on twitter or register at http://bit.ly/safeagents for updates and further information.
SAFE will officially launch and open for registrations from letting agencies on 27 May 2011.
The scheme will launch to consumers later this year following the campaign to attract letting agents to adopt the SAFE kitemark.
SAFE can be contacted on: 0845 519 7992
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