Next year could be a big year for property agents, with yesterday’s announcement from the Government that all property agents will need to be part of an approved Client Money Protection (CMP) scheme from the 1st of April 2019.
Essentially, the CMP is a way for property agents to protect their clients against theft or misappropriation of the client money.
David Cox, Chief Executive, ARLA Propertymark comments on the announcement from the Government that all property agents will need to be part of an approved CMP scheme by 1st April 2019:
“After a long fight, ARLA Propertymark’s campaign for mandatory Client Money Protection (CMP) is finally won. With the help of Baroness Hayter of Kentish Town, and cross-party consensus in the House of Lords, this is a vital step forward in improving consumer protection in the rental sector; probably more so than the myriad of other laws passed over the last two decades.
We look forward to working with the Government to guarantee that the level playing field we’ve fought so hard to create becomes a reality on the 1st April next year.”
What exactly are the benefits of a CMP?
The idea of the CMP is to help provide compensation to landlords, tenants and other clients if a property agent misappropriates their rent, deposit or any other client funds. The purpose of making this scheme compulsory is to raise standards across the industry in order to protect the consumers who need it most, and as such, the recent changes to the legislation are an integral part of this. In short, key benefits include:
- Protecting sums of money, which builds trust and confidence among landlords, tenants and other clients
- Sets agents apart from other agencies who are less reliable or trustworthy
- Tenancy Deposit Scheme (TDS) will offer a £1.50 discount per tenancy deposit if you have CMP through the Property Mark’s scheme
All property agents will need to be part of an approved CMP scheme from the 1st of April 2019
For the last three years (since May 2015), it’s been a legal requirement for lettings agencies to display details of the property redress scheme that they belong to. This also includes any fees, as well as displaying their membership of a CMP, if they had one.
The campaign by ARLA, which has celebrated the success of this scheme becoming compulsory, was started to raise awareness for the belief that letting and property agents should have to belong to a CMP.
When the legislation passed in parliament, on the 28 March 2017, the Parliamentary Under-Secretary of State, DCLG and Wales Office, Lord Bourne of Aberystwyth commented:
“My Lords, I thank the noble Baroness and the noble Lord, Lord Palmer of Childs Hill, for their time and commitment to the client money protection review. I am pleased to announce that the Government intend to make Client Money Protection mandatory in line with the recommendation of the review chaired by the noble Baroness and the noble Lord, Lord Palmer of Childs Hill.
“This will ensure that every agent is offering the same level of protection, giving tenants and landlords the financial protection that they deserve. The Government will consult on how mandatory Client Money Protection should be implemented and enforced.”