A letting agent which failed to protect clients’ money has been fined £10,000 following an investigation by Bath & North East Somerset Council Trading Standards.
Mendip Property Management Ltd, based in the Chew Valley in Somerset, was found to be operating without the necessary safeguards to protect client funds.
By law, letting or property management agents in the private rented sector in England must join a client money protection scheme if they hold clients’ money.
These schemes make sure landlords and tenants are compensated if a business cannot repay their money – for example if they go into administration. Companies must obtain a certificate confirming membership of a client money protection scheme, and provide it to anyone who asks free of charge.
Companies are also required by law to hold clients’ money in an account with a bank or building society authorised by the Financial Conduct Authority. The maximum fine for breach of the regulations is £30,000.
Mendip Property Management Ltd was issued with a penalty notice for £10,000, which it appealed. The appeal was dismissed at a First-tier Tribunal hearing on 4 February, with Tribunal Judge Brian Kennedy KC upholding the penalty and directing the company to obtain client money protection.
Kennedy said: “In all the circumstances it seems to the Tribunal that the Respondent has acted reasonably and within the Law. Accordingly, the appeal must be dismissed.”
Councillor Tim Ball, cabinet member for Neighbourhood Services at Bath & North East Somerset Council, said: “We take the protection of client funds very seriously. This fine serves as a reminder to all traders that they must comply with regulations to ensure the safety and security of their clients’ money.”
