If you are a private landlord who uses a lettings agent – here’s something to think about.
Does you agent keep any rent money due to you, separate in a client account? So that if they stop trading, your money is safe and will be passed onto you, whatever happens? If not – and the company goes bump – you could find yourself being just another creditor in a long queue with no realistic chance of getting your money. Myself and Liz (your other blog editor) were discussing this issue this morning and between us, we thought of several instances of this happening in Sandwell over the last few years.
The landlord has been sitting back thinking his or her rent money is with the agent and will be paid over to them in due course – not realising that the company has taken the rent money but has then stopped trading. The rent then gets swallowed up with the other debts and liabilities of the company. The landlord loses out.
The government is bringing in legislation to make it compulsory for agents to keep landlord money separate in a client account – but this is not in place yet. So there is still a potential risk. If you are thinking about engaging an agent to act for you or already have an agent – you might want to ask them about whether they protect landlord money.
And if you are an agent yourself and you haven’t started protecting client money yet – you might just find that offering this feature, before it becomes compulsory makes you more attractive to potential landlord clients. You will have to be doing this fairly soon anyway – so why not get ahead of the game?
Get googling this search term – ‘letting agents and protecting client money’. You will find that there are facilities for doing this through some of the professional landlord organisations. And just to say; we got thinking about this thanks to a reminder from one of Sandwell’s leading letting agents, who we would like to thank. I don’t want to name him, but he will know I mean him if I say how much myself and Liz enjoyed meeting his dog.