As a landlord, the knowledge that your money is safe is as vital for you as it is for your tenants. The Client Money Protection (CMP) Scheme offers the peace of mind that, should a letting agent misappropriate rent, deposits or any other client funds, or go into administration, then the affected parties – landlord or tenant – will be reimbursed.
It is based on the Client Money Protection Schemes for Property Agents Approval and Designation of Schemes) Regulations 2018 and is different to the deposit protection scheme which requires you to protect deposits separately if you are renting out your home on an assured shorthold tenancy that started after 6 April 2007.
A Legal Requirement
CMP is a legal requirement for all property agencies that either directly handle client money or do so through a third party and has been a legal requirement for letting agents since 1 April 2019. Agencies that attempt to operate without joining a client money protection scheme can be fined up to £30,000.
Providers Of CMP
Six Government-backed schemes operate in England currently (rules differ for Scotland and Wales). These include Client Money Protect, Money Shield, Propertymark, RICS, Safeagent and UKALA Client Money Protection. In Scotland, the same providers offer client money protection insurance for the Scottish market with the Law Society of Scotland as an additional provider.
What You Must Do
As part of the CMP regulations, clients’ money must be held in an account with a bank or building society that is authorised by the Financial Conduct Authority. In addition, the agent has to obtain a certificate that confirms membership of one of the government-backed schemes and provide it free of charge to anyone who asks. The certificate also needs to be displayed in any public-facing office and on the company’s website. Failure to display the certificate, or to provide it when requested, could result in a £5,000 fine.
In the example of Propertymark as a provider of CMP, the principal partner or director of an agency becomes a member and once approved they are then asked to regulate their company. This requires them to show evidence that they have in place professional indemnity insurance, and anti-money laundering policies, and to provide an accountant’s report which helps to show that they handle client money properly. Once all the documents have been supplied, Propertymark then provides the CMP as well as the relevant certificates the agency needs to display to prove compliance.
Proctors is an independent network of individual estate agent businesses with branches in Beckenham, Bromley, Park Langley, Petts Wood, Shirley and West Wickham. We’ve been buying, selling and letting in these areas since 1946. Our local knowledge is second to none and we are committed to making sure you get the best customer service and support to help with your move. Our reviews and reputation support this claim and show you how trusted we are. Our CMP insurance for our lettings offices is provided via Propertymark.