The Regulations impose a mandatory requirement on property agents to join a government approved or designated client money protection scheme, with the additional requirement that the membership results in the level of compensation available being at least the level of client money held. There are also transparency requirements for property agents, who must display a certificate confirming membership (in its premises) and publish the certificate on its website. The agent must also notify all clients of its membership.
The enforcement of the Regulations will be the responsibility of local authorities in England, with financial penalties of up to £30,000 for breaches of the membership requirement and up to £5,000 for breaches of the transparency requirements.
Although ordinarily only one financial penalty may be imposed for the same breach, a continuous breach may be subject to another financial penalty 28 days after the imposition of the previous penalty.
We thank member and friend, John Saulet of Saulet Townsend Limited for sharing this information. We would advise all members who collect any money on behalf of others to take legal advice if they are not a member of a redress scheme already, as they may need to do so.