Baroness Hayter of Kentish Town
Main Page: Baroness Hayter of Kentish Town (Labour - Life peer)Housing and Planning Bill
Baroness Hayter of Kentish Town Excerpts“Power to require property agents to join client money protection schemes
(1) The Secretary of State may by regulations require a property agent to be a member of—(a) a client money protection scheme approved by the Secretary of State for the purpose of the regulations, or(b) a government administered client money protection scheme that is designated by the Secretary of State for the purpose of the regulations.(2) The regulations may impose requirements about the nature of the membership that a property agent must obtain (for example, by requiring a property agent to obtain membership that results in a particular level of compensation being available).(3) The regulations shall—(a) require a property agent to obtain a certificate confirming the property agent’s membership of the scheme;(b) require the property agent to display or publish the certificate in accordance with the regulations;(c) require the property agent to produce a copy of the certificate, on request, in accordance with the regulations.(4) In this section—“client money protection scheme” means a scheme which enables a person on whose behalf a property agent holds money to be compensated if all or part of that money is not repaid in circumstances in which the scheme applies;“government administered client money protection scheme” means a client money protection scheme that is administered by or on behalf of the Secretary of State;“property agent” means—a person who engages in English letting agency work within the meaning of section 52, ora person who engages in English property management work within the meaning of section 53,other than a person who engages in that work in the course of the person’s employment under a contract of employment.”
Baroness Hayter of Kentish Town (Lab)
My Lords, this manuscript amendment is in my name and that of the noble Lord, Lord Palmer of Childs Hill. The noble Lords, Lord Palmer of Childs Hill and Lord Foster, and my noble friend Lord Kennedy had, together with me, tabled Amendment 100 about client money protection to require every letting agent to have money they hold belonging either to the tenant by way of advance rent or to a landlord as rent received to be protected, so that even if the letting agent disappeared or went bankrupt, such money would be safe and available to the landlord.
Such money is not the agent’s money and, as with clients’ money handled by solicitors and others, should be held separately in a protected client account. We sought to introduce this requirement into the Consumer Rights Bill, at which point the Government heard—and, I think, had some sympathy with—the case, but the requirement was only for every letting agent to display whether or not they had such client money protection. Our view is that this hardly works for landlords, who usually take the biggest hit when such money disappears. As my sister, herself a typical landlord with three units, said, it never occurred to her to ask her agent whether he had client money protection. It cannot help tenants who have to pay their rent to whichever agent the landlord nominates, even if it is clear that their money is not protected.
Baroness Williams of Trafford
My Lords, I am not entirely sticking to a script. In saying that, though, I hope I can reflect the views of the Government accurately. I add my tribute to the noble Baroness, Lady Hayter, and the noble Lord, Lord Palmer, and of course to the parliamentary draftsmen, who have turned this around so quickly. The noble Baroness and the noble Lord are experts in this area and have taught me much about it over the past few weeks. We have met them both in recent days and I have listened carefully to the points they have made.
I thank the noble Baroness for tabling this amendment following our discussion. If approved by this House, it will provide an enabling power for the Secretary of State to make regulations by affirmative procedure to require letting agents and property management agents to belong to a client money protection scheme. It will also provide a clear enforcement mechanism, which is important for ensuring that this regulation has teeth.
The Government have already shown our commitment to taking steps on this issue, committing to a review of the transparency legislation, which includes a requirement for letting agents to be transparent about whether they offer client money protection, and to work with the sector to explore the detailed options for regulation. However, it is important that we ensure that the regulation is balanced and does not overburden the sector, and that we get the detail of the legislation right and do not rush into it. So the review will be important in informing the details of the regulation, and I am very happy to give my assurance that the Government will act on its findings at the earliest opportunity.
There has been some discussion about “must”, “shall” and “may”. I have almost lost track of where we got to on the amendment, but I think we were satisfied on the balance of “must”, “may” and “shall”. Still, in no way does that lessen our commitment to the issue at hand.
I inform the House that the Housing Minister and I have asked the noble Baroness, Lady Hayter, and the noble Lord, Lord Palmer, to play a key role in the review of client money protection and transparency, reflecting their knowledge of and commitment to these issues, and I am very grateful that they have agreed. I hope that, with those points in mind, noble Lords will agree to support the amendment. I think that is the first time I have said that in this housing Bill.
“Client money protection schemes: approval or designation
(1) The Secretary of State may by regulations make provision about the approval or designation of client money protection schemes for the purposes of regulations under section (Power to require property agents to join client money protection schemes).(2) The regulations may, in particular, make provision about—(a) the making of applications for approval;(b) conditions which must be satisfied before approval may be given or a scheme may be designated;(c) conditions which must be complied with by administrators of approved or designated client money protection schemes (including conditions requiring the issue of certificates for the purposes of regulations under section (Power to require property agents to join client money protection schemes)(3) and about the form of those certificates);(d) the withdrawal of approval or revocation of a designation.”