Compulsory Client Money Protection will be the law from next April 1.
Yesterday, the Government laid regulation which, if approved by Parliament, will require all letting agents in England to have CMP.
However, the timing of compulsory CMP throws some doubt on when the tenant fee ban will be implemented.
Previously, the Government has said that compulsory CMP will be implemented first, so that if any agents go out of business as a result of the ban, arrangements would be in place to protect clients. Yesterday, ARLA Propertymark said this was also their understanding.
From next April, local authorities will have the powers to fine agents up to £30,000 if they do not belong to an approved scheme; and fine agents up to £5,000 if they do not display details of their CMP scheme both in their offices and on their websites.
David Cox, chief executive of ARLA, said: “After a long fight, ARLA Propertymark’s campaign for mandatory Client Money Protection 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 April 1 next year.”
Gerry Fitzjohn, chairman of The Property Ombudsman board, said: “The Property Ombudsman supports today’s announcement from the Government that Client Money Protection will be compulsory for property agents.
“Ultimately it will make the sector a fairer place for consumers, and we look forward to this coming into effect next year.”
John Midgely, chair of SAFEAgent, said: “This new law is a huge win for the consumer. It’s been a long hard road to mandatory CMP but we’re delighted our hard work paid off andn we’re finally here.”
Isobel Thomson, CEO of NALS, said it was an important milestone for the industry, “following too many cases of rogues and criminals taking money from innocent tenants and landlords”.
Comments (9)
How about landlord tax protection, after all, it is they who are propping up the rental sector?
I can see that many investors will be taking control of their own lettings, and unlike Landlords who manage their own tenants and properties, will not have the faintest idea of what to do. I cannot see that these new regulations will help tenants at all!
Now we need the insurance providers to supply the CMP to independent agents who do not belong to NALS or ARLA or other trade groups, will agents now need to bring in full time book keepers, how do they meet this extra cost burden given the pending ban on Tenant fees. There seems to a fundamental lack of understanding by the Government how the industry works and the extra cost burden on small independent agents.
CMP is available without being a member of NALS or ARLA if you are a member of TPO redress. So save yourself alot of money and not join those two worthless organisations who have no teeth when it comes to helping the industry and its members?
I am working on a code of conduct, that will allow me to offer non NAEA, non arla, non TPO agents access to meaningful CMP.
You can buy CMP through this Company without having to be a member of ARLA , NLA etc
https://www.clientmoneyprotect.co.uk/consumer#
i think ARLA expect the tenant fee ban to be introduced in October 2019 according to what was said at thier recent Conference.
The problem is that when an agency goes down or the management run off with the cash it hurts multiple tenants in one go. Private portfolio Landlords heavily geared could be vulnerable to S24 so perhaps there is an arguement for Landlords owning five or more properties to have CMP or use a custodial deposit scheme.
As around 50% of the lettings in UK are in the hands of private landlords, would it not seem prudent to place a requirement upon them to use a Client Money Protection scheme? They are almost totally unregulated and must represent an equal or greater risk.
Agree with MatinMass53.
The rules should apply to individuals and companies.
Why put all the burden on the agents.