020 8859 1700 Book a Demo

Client Money Protection

Client Money Protection

Although, on April 1st 2019, all property agents carrying out work in relation to housing in England were required by the government to be a member of a Client Money Protection - CMP - scheme, it appears that many Letting Agents are not following through with all the rules that came into force.

All Letting Agents must:

  • Belong to a Government approved CMP scheme.
  • Display a certificate which confirms the agent's membership to an approved CMP scheme (including in-branch and on the firms website).
  • Produce a copy of the certificate to anyone who reasonably requires it, free of charge.
  • Notify all clients within 14 days if their CMP membership is revoked, or they change to a different approved CMP scheme.
  • Provide clients with the name and address of the scheme to which they become a member.
  • Have and comply with written procedures for handling client money and keep records and accounts that show all dealings with client money.
  • Hold client money in a client money account with a bank or building society authorised by the Financial Conduct Authority.
  • Hold and maintain professional indemnity insurance cover that is appropriate for the member's size, income, type of work and the amount of client money held.
  • Repay any client money, including where feasible any interest earned, without delay if there is no longer any requirement to retain that money or the client requests it.

The regulations also state that the agent must ensure the level of CMP membership provides sufficient cover to compensate clients for the maximum amount of client money that they hold.

Local Authorities will have the powers to:

  • Impose fines of up to £30,000 on agents who do not belong to a scheme beyond this date.
  • Impose fines of up to £5,000 on agents who fail to display correct scheme membership details on the business premises and on websites.

It's also important to note that if an agency is in breach of the regulations, they will be deemed to have been in breach of the regulation across all local authority areas in which they operate.

Having trouble keeping track of new legislation? - Estates IT, supplies award winning PCHomes software to the Estate/Letting Agents industry, which manages all your documentation effortlessly. There is a specific module for tracking and maintaining licences, compliance and document information.

Book a demo for PCHomes Plus

Deb Roberts

Written by Deb Roberts

Source Estates IT Ltd

Other Related News: Legal

Tenant Fees Ban Comes Into Force June 1st 2019

From 1st June 2019 it will be illegal in England to charge any fees to tenants, licensees, guarantors, relevant persons or anyone acting on their behalf or guaranteeing their rent, other than a set list of Permitted Payments on new tenancies

Jacqueline Stow


Written by Jacqueline Stow
Source Estates IT Ltd

Read more

Work & Pensions Select Committee 'No DSS' Debate

MPs call on Landlords and Letting Agents to scrap 'no DSS' clauses in rental ads

Deb Roberts


Written by Deb Roberts
Source Estates IT Ltd

Read more

Right To Rent Breaches Human Rights Law

The High Court has ruled the government's Right to Rent scheme breaches human rights law.

Deb Roberts


Written by Deb Roberts
Source Estates IT Ltd

Read more

Mandatory Client Money Protection 1st April

From 1 April 2019, all property agents carrying out work in relation to housing in England will be required to be a member of a Client Money Protection scheme.

Deb Roberts


Written by Deb Roberts
Source Estates IT Ltd

Read more

Tenant Fees Bill Comes Into Force June 1st

It has been announced that the Tenant Fees Bill will come into force on June 1st this year. This means that, subject to the bill getting Royal Assent, the ban will apply to all tenancies signed after this date.

Deb Roberts


Written by Deb Roberts
Source Estates IT Ltd

Read more