Client Money Protection (CMP) is a scheme that reimburses landlords and tenants should an agent misappropriate their rent, deposit or other client funds and it has long been a requirement for our members to have CMP.

Following our campaigning it is now mandatory for all letting agents in England, Wales and Scotland to have CMP and we continue to push for mandatory requirements in Northern Ireland.

Leading the campaign on CMP

It has been estimated that letting agents hold approximately £2.7 billion in client funds at any one time and yet, if they are not covered by Client Money Protection, both the landlord and tenant stand to lose their money. Before regulation, it was thought £700 million is not protected, leaving tenants and landlords vulnerable to agents who go out of business or abscond.

Since 31 January 2018, CMP is a mandatory requirement for all letting or managing agents in Scotland under the Letting Agent Code of Practice.

In 2017 the Northern Ireland Executive carried out a review into the private rented sector with proposals for change. We continue to push for reform including the introduction of mandatory CMP as part of the Virtual Housing Panel. 

When legislation for licensing requirements were being developed Propertymark was part of the Welsh Government’s Working Party and pushed for mandatory CMP alongside the Code of Practice. 

Why is CMP important?

Letting agents hold a significant amount of money in the form of deposits and rent on behalf of tenants and landlords. CMP ensures that funds are held in a designated client account and in the event of an agency going bust or misappropriating funds, it offers landlords and tenants a route to compensation.

Case studies:

Martin fronted a string of letting agencies and used numerous aliases between 2009 and 2015 to pocket £221,000 from more than 60 tenants and landlords. He repeatedly offered tenants properties he had no right to let out, took deposits from multiple tenants for the same property, moved in different tenants than those promised and used a variety of methods/excuses to hold on to thousands in deposits and rents.

David stole £123,000 from landlords, pocketing rent and deposits paid by tenants rather than passing the cash to his clients over four years. During this time, he put tenants' rent and deposits into the company's 'working capital' account.

Janine of Stour Provost took money from a branch of Dorset Lettings, which she ran under franchise. Police investigations uncovered that financial records showed Janine paid for Mediterranean cruises and a £7,000 Welsh pony with the proceeds.

The situation caused much stress and worry for staff, landlords, tenants and suppliers. However, the agency was ARLA Propertymark Protected so landlords and tenants were able to recoup their losses through our CMP scheme.

Westminister lobbying, victory in our campaign for mandatory Client Money Protection (CMP) in England

November 2015
We responded to DCLG’s technical discussion paper, which formulated many policies in the Housing and Planning Act 2016. We provided written and oral evidence to the Public Bill Committee in the House of Commons who were scrutinising the Housing and Planning Bill before it became an Act of Parliament. At the oral session, we were asked by MPs to provide further details about the type of amendment we would like to see for CMP.

February 2016
Baroness Hayter reintroduced the CMP amendment when the Bill was looked at by the House of Lords after the amendment was initially withdrawn in the House of Commons in December 2015. Our members wrote to the members of the House of Lords urging them to support the amendment.

The Bill went back to the Commons and the Government introduced an enabling power to make regulations to require letting agents in England to have CMP.

September 2016
We responded to the CMP review and gave evidence to a closed session of Peers in the House of Lords to outline why the introduction of mandatory CMP for the whole sector is vital.

December 2017
Mandatory CMP moved a step closer with the launch of a consultation inviting views on how the rules should be designed, implemented and enforced. The consultation posed nine key questions including minimum levels of cover, the impact on the size of different businesses and whether Trading Standards should enforce the rules and penalties for non-compliance.

07 Dec 2017
Mandatory Client Money Protection Schemes for Property Agents

We have issued our response to the Government consultation on mandatory CMP giving our views and comments on how the rules should be designed, implemented and enforced.

April 2018
The Government published its response to the consultation on the introduction of mandatory CMP for letting agents. They announced that legislation will be brought forward to introduce privately led CMP schemes and civil penalties of up to £30,000 for agents who fail to comply.

CMP was voluntary at the time with approximately 60 per cent of letting agents signed up to a scheme. By making CMP mandatory, it ensures that every agent is offering the same level of protection and gives tenants and landlords the financial protection they deserve.

May 2018
The Government laid regulations that, if passed by parliament, would require all agents managing lettings in England to belong to an approved CMP scheme by 1 April 2019. The draft regulations gave Local Authorities the powers to:

  • Impose fines of up to £30,000 on agents who do not belong to a scheme beyond this date.
  • Impose fines of up to £5,000 on agents who fail to display the correct scheme details on their premises and website.

December 2018
Parliament amended the CMP regulations during the legislative process of the Tenant Fees Act. The amendment clarified that government-approved CMP schemes will not be required to cover money protected in one of the three permitted tenancy deposit schemes. The amendment tabled by Baroness Hayter of Kentish Town allowed for the CMP regulations to come into force from 1 April 2019, ahead of the ban on tenant fees.

February 2019
We received formal approval from the Housing Minister to operate as a government-authorised CMP Scheme.

25 Feb 2019
Propertymark's Client Money Protection scheme secures Government approval

Propertymark has received formal approval from the Housing Minister, Heather Wheeler MP, to operate a Government-authorised Client Money Protection (CMP) Scheme.

Pooled Client Accounts, campaigning for improved guidance

We welcomed improved Joint Money Laundering Steering Group (JMLSG) guidance on Pooled Client Accounts (PCAs) following our response to JMLSG’s review and sustained engagement with HM Treasury and UK Finance to make it easier for letting agents to meet their legal obligations.

12 Jun 2020
Joint Money Laundering Steering Group (JMLSG) proposed draft guidance on Pooled Client Accounts

We responded to the JMLSG proposed draft guidance on Pooled Client Accounts outlining that the banks' expectations of letting agents do not coincide with the legal requirements for Anti-Money Laundering (AML) and Client Money Protection (CMP) regulations.

09 Sep 2020
Propertymark pressure leads to improved guidance on Pooled Client Accounts

We welcome improved Joint Money Laundering Steering Group (JMLSG) guidance on Pooled Client Accounts (PCAs) following our response to their review and sustained engagement with HM Treasury and UK Finance to make it easier for letting agents to meet their legal obligations.

Related news

15 Jul 2021
Seven agents expelled from The Property Ombudsman

As per the strict processes put in place by The Property Ombudsman (TPO), the agents were referred to the TPO’s independent Compliance Committee, which ruled they should be expelled with most failing to pay compensatory rewards.

15 Mar 2021
Fine underlines importance of having CMP

Propertymark received a report that a letting agent in Kensington and Chelsea has been issued a fine of £20,000 for not belonging to a Client Money Protection scheme, despite applying to join one. The case underlines the importance of having Client Money Protection (CMP), with Trading standards taking action even when an application is in progress.

09 Sep 2020
Propertymark pressure leads to improved guidance on Pooled Client Accounts

We welcome improved Joint Money Laundering Steering Group (JMLSG) guidance on Pooled Client Accounts (PCAs) following our response to their review and sustained engagement with HM Treasury and UK Finance to make it easier for letting agents to meet their legal obligations.

19 Dec 2019
Lettings boss jailed and sanctioned after £230,000 fraud

The director of a Southampton lettings firm has been jailed after defrauding landlords and tenants out of more than £230,000.

24 May 2019
The Property Ombudsman issues revised Codes of Practice

On 1 June, The Property Ombudsman (TPO) scheme’s updated Codes of Practice will become effective. The revisions are substantial and incorporate the Tenant Fees Act, Client Money Protection and GDPR requirements.

01 Apr 2019
CMP becomes a legal requirement in England

Membership of a Government Approved Client Money Protection (CMP) scheme becomes a legal requirement for all agents in England dealing with residential lettings across England from Monday 1 April.