28th January 2003

Stringent financial controls and compliance procedures have helped to slash the cost of providing the most wide ranging client’s money protection bonding scheme in the lettings industry. This covers landlords’ rents and tenants’ deposits in particular and it has been described as a remarkable tribute to the professionalism of letting agents who are members of the Association of Residential Letting Agents, ARLA.

ARLA is the only professional body to be solely concerned with the Private Rented Sector which is so popular with Buy to Let investors.

At the ARLA Annual Conference in London this week (Thursday 30th January at the Royal College of Physicians), it will be announced that the cost of premiums to member firms for the ARLA Bonding Scheme will be cut by an average of 35% from April 1st. This dramatic reduction is for the unique ARLA Scheme for the protection of the public’s money. The scheme is wider in scope and more responsive than any other bonding scheme available to landlords and tenants in the Private Rented Sector.

The ARLA Bond is an insured scheme. It provides cover of up to £2 million, with no individual limits for either the public or member letting firms. Other schemes operated in the lettings industry limit the compensation available to individuals to only £10,000. The total cover for individual letting agents belonging to these other schemes is only £100,000 or less.

Announcing the new rates, Adrian Turner, Chief Executive of ARLA, said he would be lobbying the other two professional organisations to bring their bonding schemes into line with ARLA.

“Otherwise there will be confusion and the public will be not understand quickly and easily to what extent they are covered. This is dangerous as there are still letting agents operating in the market who offer minimal or no safeguards to the public and so have the ability to bring the industry into disrepute.”

Mr Turner was referring in particular to the high profile crash of a letting agency in Nottingham last summer where landlords and tenants have not been compensated for upwards of £1 million in lost deposits and rents.

The ARLA Bond is a Bond of First Resort. Uniquely in the property industry, this allows for direct restitution from the Association to any member of the public who can show that their money has been misappropriated. Unlike any other bonding scheme, with ARLA there is no need for landlords and tenants who believe they have lost money in this way to go to court and prove theft or fraud before the Association makes reimbursement.

Said John Hornsey of Thomas Winter, the honorary insurance advisers to the Association, “In today’s insurance climate, it is a remarkable achievement by ARLA and its member letting firms that they can demonstrate such professionalism and control over their client accounts and that their premiums for such large amounts of cover for the public can be reduced, and reduced so substantially.”

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