The Property Ombudsman (TPO) has expelled six estate and letting agencies from their redress scheme, several of them over disputes involving mishandled client money.
In each case, the agencies were excluded for failing to pay compensation to their clients as ordered by TPO. Three of the original disputes concerned money handling – two of the agencies had failed to pass on rent payments to landlords, while a third had not handled a tenant’s deposit correctly.
Being excluded makes it very difficult to do lettings legally. By law, letting agencies in England and Wales must belong to a government-approved redress scheme. TPO is one of only two currently operating. Several of the excluded businesses already appear to have stopped trading, and details have been passed on to Trading Standards to stop them from reopening under new names.
The cases demonstrate the potentially dire consequences of incorrect client money handling. By putting robust payment controls in place, agencies can ensure that money is passed on to landlords while also preventing employees from diverting money. Generating automated transaction logs further makes it easy to track down any missed payments.
Mishandling of money could be far more widespread than the numbers of excluded agents suggest. TPO’s own stats show that agencies comply with compensation orders in 98% of cases, paying out awards of up to £25,000. Tightening up payment systems now could prevent a very expensive payout down the road.
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