Mandatory Client Money Protection (CMP) for letting agents now looks certain to be a legal requirement in England following a Parliamentary review led by Baroness Hayter and Lord Palmer.
Acceptance of its recommendations now suggest that, in future, letting agents will not be able to take money from the public unless they have Client Money Protection.
What is CMP?
Client Money Protection offers peace of mind to landlords and tenants that, should an agent misappropriate their rent, deposit or other funds, their money remains safe. All agents are required to hold client money in a separate ‘Client Account’, but currently there is no requirement to have those funds insured against unlawful use or fraud. If a letting agent, which doesn’t have CMP, were to go into liquidation, the likelihood is that landlords and tenants could find themselves out of pocket.
What we think?
Client Money Protection is not new to the thousands of experienced agents that have had comprehensive CMP cover with a trade body such as ARLA or NALS for many years. Unfortunately, a few rogue agents tarnish the vast majority of good agents who are offer an excellent lettings and management service. Hopefully the introduction of mandatory CMP will improve the industry by safeguarding landlord’s and tenants’ money and also raise awareness to consumers of the importance of only using an agent that can prove they have CMP in place.
At Townends we use my|deposits to ensure our landlord’s and tenants’ money is protected. If you want to find out more about our lettings and management service contact Townends Property Management Team today on 01932 736 505.