Agents – time running out to register for CMP

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Client Money
Protection:

Client Money Protection (CMP) is an insurance product for letting agents.

CMP protects the rental money that a tenant pays their letting agent to pass on to a landlord. Many landlords and tenants are unaware of CMP and how it can safeguard rental money should an agent go into administration or attempt to use client funds fraudulently.

CMP is becoming available through several providers and policies will be in place well before the deadline of 1^st April 2019. Agents that belong to an industry trade body may already be covered under their membership schemes. The following trade bodies offer comprehensive CMP cover to their members: RICS, ARLA, UKALA and NALS.

From 1^st April 2019 all agents managing lettings
in England must belong to an approved CMP scheme and must:

• Display a certificate confirming membership of
  an approved CMP scheme in each branch and on the firm’s website.
• Give a copy of the agency 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

The agent must ensure the level of CMP membership provides
sufficient cover to compensate clients for the maximum amount of client money
being held.

Local authorities will have the power to impose fines of up
to £30,000 for failure to belong to a scheme and up to £5,000 for failure to display
the correct scheme membership details on the business premises and on websites.

There are currently 4 schemes to choose from and more are
expected:

Client Money Protect

Money Shield

NALS

UKALA

To avoid heavy fines, agents must have CMP in place by April
1st 2019, so time is running out.

Here is the enacting legislation:

The Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2018

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