Compulsory CMP to come in before fees ban which Government admits could drive some agents out of business’

The Government has officially recognised that the fees ban could result in agents closing down.

It said that Client Money Protection is to come into force before the ban on tenant fees.

This is to “ensure that client money is not lost” in the instance of any agent going out of business as a result of the ban.

Agents without CMP could be fined £30,000.

In an announcement early on Easter Day, it said Regulations will be laid as soon as parliamentary time allows requiring agents to have Client Money Protection.

At the same time, other Regulations will set out the process by which CMP scheme providers will be chosen.

The Government revealed there were 117 responses to its consultation last year on compulsory CMP.

Most (42%) were from agents, with 22% from tenants and landlords.

CMP schemes will be approved in a similar way to redress and tenancy deposit protection schemes. However, the legislation will allow the Government to step in and create its own CMP scheme if necessary.

The Government also made it clear that it will not require agents to belong to a membership body in order to be able to offer CMP.

Enforcement of the CMP requirement will be by county councils’ Trading Standards, but there could also be enforcement by local housing authorities.

Agents flouting the CMP requirement could face a civil penalty of up to £30,000. However, non-compliance would not be a criminal offence or lead to a banning order.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/696038/Client_Money_Protection_response.pdf

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4 Comments

  1. Bless You

    wow what a pro business govt.

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  2. markus

    ‘We recognise that our policies will cause undue hardship to some of you, so here’s an additional expense just to turn the knife….’

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    1. AgentV

      Meanwhile whatever decisions we make that affect your business, they do not affect us, as we all get paid at the end of each month…..even if the whole economy does crash.

      Have a nice day,

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  3. jeremy1960

    Given that government expect letting agents to go out of business because of the tenant fee ban the pitch to insurance companies will be quite interesting and the premiums……? It’s a bit like trying to insure the car as you drive towards the wall!

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