Client Money Protection schemes could become compulsory next month
Landlords and tenants could benefit from extra protection when handing money over to letting agents if Client Money Protection (CMP) schemes become compulsory in England.
Key provisions relating to CMP, as published by the government back in February, came into force this week, allowing new regulations to be passed more quickly by Housing Secretary of State Sajid Javid.
Letting agents and property managers in England who are not already members of approved CMP schemes, such as the National Approved Letting Scheme (NALS) or ARLA Propertymark, could be obliged by law to join one as soon as April 1.
Tim Frome, associate director at Hamilton Fraser – the firm which administers Client Money Protect – said: “After being heavily involved in the two consultations to date, I am delighted that the government appears to be following Scotland and Wales in moving quickly to make membership of a client money protection scheme compulsory for letting agents in England.
"The groundwork has been laid for CMP regulations to be introduced, the details of which are likely to be unveiled in April when most regulations appear.”
Agents and property managers who fail to comply once CMP becomes compulsory are likely to face fines, which will be charged by local authorities or trading standards, but exact details of how the system will work have not yet been published.
At present, many letting agents already subscribe to such schemes, which protect the money of landlords and tenants – including rental payments collected by agents or property managers, tenancy deposits, and funds held to be used for repairs and maintenance.
CMP schemes prevent theft or misappropriation of funds, and they are already compulsory in Scotland and Wales.