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What is Client Money Protection?

What is Client Money Protection?



Client Money Protection (CMP) ensures that the money a landlord or tenant pays to a letting agent is safely protected whilst it remains in the custody and control of the agency.   CMP will ensure that the landlord or tenant client is reimbursed in the event that their letting or managing agent goes into administration or misappropriates client funds in their control.


Similar to ATOL or ABTA in the travel industry, CMP is there to protect the consumer.


There is currently an estimated £2.7bn of client money held by letting agents (excluding deposits) in England alone, and the government will impose mandatory CMP onto all letting agents in 2018.
Elsewhere in the UK, agents in Wales must have CMP as part of the Rent Smart Wales initiative and Scotland is introducing CMP as a legal requirement in January 2018.


Letting agents with CMP must maintain and operate a separate a Client Money 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 scheme for its return.


How can I get CMP?

Traditionally, trade bodies such as ARLA, NALS, RICS and UKALA were the only suppliers of CMP. In order to gain this valuable added layer of protection for clients, you had to choose a trade body and meet their joining criteria, pay their membership fee and only then would you be eligible to gain CMP. 


From there, you are required to purchase their CMP insurance, which is either part of the membership cost or a separate premium or levy. Should you wish to leave the trade body for whatever reason you are faced with also leaving their CMP scheme and losing this important consumer protection for you customers.


What if I’m not part of a trade body?

Client Money Protect is a membership scheme that focuses purely on client money and its’ protection. In the event of a claim, your landlord/tenant contacts Client Money Protect and we deal directly with them, reimbursing their losses where appropriate. Client Money Protect does not sell individual insurance policies. By being a member of Client Money Protect your clients obtain this important protection and the Scheme is insured against its liability to pay claims where agreed. 


The vast majority of letting agents qualify for our standard, flat membership fee of £299 + VAT. However, if business is going well and you hold over £500,000 in client money in your client bank account then we can put together a tailored package for you.