The National Approved Letting Scheme (NALS) has this week urged all would-be tenants to seek out regulated residential letting agents as a first priority when renting, to ensure all hard-earned deposits and rent are placed into safe hands.

This advice from the national accreditation scheme comes before the much awaited Government announcement over Tenancy Deposit Protection (TDP) – an issue which has been particularly highlighted by the collapse of a Christmas savings club backed by no insurance or designated bank trust account to protect its investors. In helping tenants and landlords to ensure they are not victims of the same fate, the Scheme has warned of the pitfalls of not seeking an agent which can guarantee the protection of client money.

“People are often unaware of the questions they should be asking letting agents in the private rented sector and it is important that consumers take the time to vet them carefully, before handing over deposit money and signing on the dotted line” stressed NALS chair, Caroline Pickering.

“Tenants and landlords who reassure themselves about their agent and ask them about both their accounting practices and whether they have Client Money Protection cover, are best placed to avoid similar predicaments to those who have recently featured in the national press.

“It’s estimated that residential letting agents currently hold £12 billion of client monies in rent and deposits, but only when it is too late do consumers consider asking their agent whether the monies are held in a designated client account and whether they have the necessary insurance in place to protect that money, in the event that the firm were to experience financial difficulties or if the money were misappropriated” advised Pickering.

With around 60 per cent of the sector unregulated, consumers should be asking their lettings and management agents whether they can offer this protection and if not, why not. “Although the operation of Tenancy Deposit Schemes will not take effect until April 2007, consumers can act now to ensure they are covered and we’re urging tenants and landlords to be ahead of the game in protecting themselves against unscrupulous operators” she concluded.

There are currently approximately 8 to 10,000 agents in the private residential sector, of which only around 40 per cent come under any regulatory framework and can offer the necessary protection to consumers. Member firms of NALS and the professional bodies, ARLA, NAEA and RICS, must meet clearly defined criteria as a condition of their accreditation or membership, which includes Client Money Protection cover.