– 22 March 2019 –
Is your letting agent complying with the latest client money protection regulations?
The new regulations that came into force on 1st April 2019 under the Housing and Planning Act 2016 require all Letting and Property Management Agents in England, operating in the private rental sector, that hold money on behalf of clients to belong to an approved client money protection scheme.
There are several different approved schemes, including Client Money Protect (CMP), of which Excel Property Services are a member. CMP ensures the money that a landlord or tenant pays to a letting agent is safely protected against misappropriation by the agency.
Agents must hold clients’ money in an account with a bank or building society authorised by the Financial Conduct Authority, get a certificate confirming membership of the scheme they have joined, and provide it to anyone who asks, free of charge. The certificate also needs to be displayed in any office where the public have access as well as on their website.
Letting agents that have CMP must maintain and operate a separate account with their bank, where all client money is held separately from their operating funds. Examples of client money can include tenants’ deposits (before and after they’re protected), landlords’ repair funds, rents, service charges and arbitration fees. So, in the unlikely event that money is mishandled by the agent, the landlord or tenant’s money is secure, and they can make a claim from the relevant CMP insurance scheme for its return.
Penalties for non-compliance are significant and agents can be fined up to £30,000 if they do not join a client money protection scheme, or up to £5,000 if they do not display a certificate of membership or provide it when asked.
To view Excel’s CMP Certificate, please click here.