Key provisions relating to Client Money Protection, as published by the Government in February, come into force today.
These allow the Secretary of State to pass Regulations, meaning that agents could have to offer CMP from as early as April 1 – two weeks away.
Exact details of when and how the system will work are yet to be confirmed.
However Tim Frome, associate director at Hamilton Fraser, administrator for an existing scheme called Client Money Protect, said regulation is imminent and will affect letting agents, relocation agents and property managers in England.
He said: “The Government appears to be following Scotland and Wales in moving quickly to make membership of a CMP scheme compulsory for letting agents in England.
“With key provisions in place, 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.”
Membership of a CMP scheme protects the money of landlords and tenants against theft or misappropriation by the owners of a letting agent while it is in their custody.
This could include monies such as tenants’ deposits and landlords’ rental payments, or funds held for repairs and maintenance to a property.
Agents who are already a member of a body such as NALS or ARLA Propertymark will already have CMP.
Lord Palmer of Childs Hill, who co-chaired the consultation committee alongside Labour’s Baroness Hayter, said: “I expect the Regulations to be finalised and released very shortly.”
It is likely there will be a couple of approved CMP schemes for agents who don’t already have cover to choose from, and failure to join a scheme is likely to be enforced by financial penalties which will be levied by local authorities or trading standards.