Requirement for Letting Agents to belong to a Client Money Protection Scheme

Filed in Landlords by on 25th February, 2019 0 Comments

The Client Money Protection (CMP) Schemes for Property Agents (Req’t to belong to a Scheme etc.) Regulations 2018” comes into force in 1st April 2019.  The act requires that all Letting and Property Management Agents join a Government approved CMP Scheme.

Approximately 60% of agents are already registered with a CMP scheme provider, however, some existing schemes may not meet the new legislation that defines the requirements of such a CMP scheme and hence agents should confirm compliance with existing or new CMP schemes before signing up to them. CMP schemes must meet the new requirements of “The Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018“.

CMP schemes give landlords and tenants confidence that their money is safe when it is being handled by an agent. Where an agent is a member of a CMP scheme, it enables a tenant, landlord or both to be compensated if all or part of their money is not repaid (examples of this may include an agent going into administration or misappropriating funds).  Note that the concept of ‘client monies’ in this context does not include tenancy security deposits, which must always be held in a Government approved tenancy deposit scheme.

This will be welcome news for Landlords who employ the services of an agent to collect rent and manage their properties, however, agents who are not currently members of a CMP scheme will face additional overheads and are likely to flow down theses costs onto their client landlords.

The enforcement of the new legislation for agents will be conducted by Local Authorities.

 

 

About the Author ()

Rob Crawford is the chairman of the Association of Local Landlords (Wessex). Rob is a practicing landlord with a property portfolio that includes small private residential properties and HMO's. Rob is a qualified letting agent and former owner of Kingfisher Lettings & Management. He is now a share holder of the successful online lettings company Lettingsupermarket.com.

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