Letting agent client account update
In recognition of the difficulties some letting agents are still experiencing in setting up client accounts, the Scottish Government has decided to amend legislation to remove the requirement for agents to confirm they hold a client account and client money protection (CMP) insurance when applying for registration. Once the legislation has been changed and the registration website amended, the system will instead ask agents to declare whether they have a client account and CMP insurance.
The change to legislation does not remove the requirements in the Code of Practice to hold client bank accounts and client money protection insurance. The First-tier Tribunal will remain able to consider applications for a breach of these and other aspects of the Code. Agents should therefore keep and maintain appropriate records to help demonstrate what they have done to try to comply with the Code.
The change to registration requirements will allow those letting agents who have been unable to open a suitable account, through no fault of their own, to make an application to the Scottish Letting Agent Register by the 1 October deadline and avoid themselves trading unlawfully.
The government will assess each application which declares that the agent does not have a client account and CMP insurance and will request information from the applicant on what they have done to try to obtain them. If they consider that the agent has not taken adequate steps to try to comply with these aspects of the Code, they will ask that the agent takes action immediately to rectify the situation.
SAL and the Scottish Government have engaged with HM Treasury, UK Finance and individual banks to find a solution and have made some progress with both RBS and Clydesdale stating that they now offer compliant accounts to letting agents. However, despite this, the government is concerned that the issue will not be fully resolved before the deadline for agents to make an application to the register.