News & Blog

Client Money Protection (CMP) Consultation

Client Money ProtectThe government has established a working group within the House of Lords to look at how CMP is currently operating and whether to go further by making use of the powers taken through the Housing and Planning Act 2016 to make it mandatory.

 

A consultation is now underway and those within the industry have been asked to provide responses to the government to assist them with deciding whether to make CMP compulsory for all letting agents.

 

A CMP scheme protects the client money of landlords and tenants in the event of a letting or property agent going into administration and against theft or misappropriation by the agent whilst it is in their custody or control. These are frequently tenants’ deposits and landlords’ rental payments but can also include monies held for repairs and maintenance to the property.

 

Industry estimates indicates that letting agents currently hold approximately £2.7 billion in client funds but if a letting agent is not covered by a CMP scheme, both the landlord and tenant could stand to lose their money.

 

Although it is not a legal requirement for a letting agent to be a member of a CMP scheme the voluntary system was reinforced by the Consumer Rights Act 2015 which required letting agents to display prominently in their offices and on their websites: their fees, whether or NOT they are part of a CMP scheme and which redress scheme they belong to. It was the government’s view, at the time, that with this the balance regulation for letting agents was about right.

 

To assist with our response to the government we would like to hear from you. Please fill out this survey (2 lucky responders will win a £50 Amazon voucher)

 

If you are interested in obtaining client money cover then our preferred supplier is Client Money Protect (CMP)

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Property Redress Scheme is approved by Government under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015