Belvoir admits to client money issues at four offices

A second large lettings franchise chain has admitted to problems within its network over missing client money.

Mike Goddard, founder of Belvoir, said yesterday that there had been issues within the last 12 months at four of the offices which are all operated by the franchisees as independent businesses.

The offices are: Norwich, St Albans, Bearwood (Birmingham) and Gravesend.

The admission follows a string of cases at Martin & Co and will be among those highlighted to Communities and Local Government as part of a campaign by Estate Agent Today to change the law.

There have been other cases where landlords have lost money through letting agents in Canterbury, Wembley, Liverpool, Berkshire and Manchester.

The missing money in these cases includes both rent and tenants’ deposits. In one case, a landlord says he is owed £5,000. In another, the agent has gone bust, only to start trading again as a sales-only agency. In another, the landlord is having to repay the tenant their lost deposit, even though the landlord claims that the agent was a member of NALS and the deposit was protected.

Yesterday, Mike Goddard said: “There is no regulation at the moment which requires lettings agents to operate a ring-fenced clients’ account, although there is a degree of protection for tenants’ deposits under the various tenancy deposit schemes. 

“The main protection for rents therefore is for lettings agents to be insured under a clients’ money protection scheme such as that offered by NALS and ARLA. 

“This issue has of course been widely discussed in various recent national reports, including the Government sponsored Rugg Review of the private rental sector, and most have concluded that lettings agents should have light touch regulation which would include protection for the consumer such as client money protection, complaints procedures and professional indemnity.

 “Belvoir takes these issues very seriously and as a franchise group with over 140 independently owned offices is very aware that the landlords and tenants are of course Belvoir clients. 

“Our franchise owners are highly trained before they are offered the opportunity to take a franchise, including how to operate a separate and regularly reconciled client account, and are monitored and supported on a regular basis by a team of 12 support advisers from central office.

“Belvoir is not totally immune to the possibility of agents being less than honest with their clients’ money, despite the training, support and monitoring, since each franchise is an independently owned legal entity. 

“Indeed, in the last 12 months we have had issues with Bearwood, Gravesend, St Albans and Norwich. 

“However, we have supported the Government-backed National Approved Lettings Scheme since its inception and the vast majority of our offices are members of NALS and as such are independently audited and have the benefit of first resort client money protection insurance. 

“If an office is not a member or lets its membership lapse, then we are notified immediately by NALS and we undertake our own audit. If we have reasonable evidence that any monies are missing, then we can take immediate action to terminate the franchise, contact all the clients to offer them a service moving forwards, and inform the police. 

“The Crown Prosecution Service then consider taking action against the owner and coordinating a claim for any lost monies.

“It is always very unfortunate that occasionally a lettings agent is less than honest with the clients’ money and we all need to be doubly careful in these recessionary times to ensure all clients’ money is meticulously accounted for. 

“Personally I am a supporter of light touch regulation for lettings agents and we in Belvoir are fully committed to raising the professionalism of our industry in any way we can.”

Article courtesy of EAT http://www.estateagenttoday.co.uk/News/lettings/?title=Belvoir%20admits%20to%20client%20money%20issues%20at%20four%20offices&storyid=2705&type=lettings