In this two-minute read, we explain why your letting
agent should be part of a client money protection (CMP) scheme.

The
lettings sector used to be the Wild West of the property market, with a small
group of unscrupulous agents giving the industry a bad name.

Thankfully,
the introduction of stricter regulations in recent years has sent many cowboy
agents riding off into the sunset.

But
no industry is perfect, and landlords and tenants still need to be wary of
rogue operators.

If
you’re looking to do business with a letting agent, one of the first things you
should check is that they are a member of a client money protection scheme
(CMPS).

By
law, all letting agents in England who handle ‘client money’ – in other words,
hold rent or holding deposits on behalf of customers – must be a member of a
CMPS. (Note: this is different to a tenant deposit scheme, which agents should
also utilise.)

A
CMPS is basically an insurance policy. It means that if an agent goes bust or
does a runner while holding funds on behalf of clients, the landlords and
tenants affected receive compensation. (This didn’t always happen in the
old days.)

How
can I tell if an agent is a member of a CMPS?

There
are six approved CMPSs: Client Money Protect, Money Shield, Propertymark, RICS,
Safeagent (previously NALS), and UKALA Client Money Protection.

For
the record, here at CWB Property, we’re members of CMPSs:
Client Money Protect.

Agents
must display details of their CMPS membership on their website and in their
office.

Always
verify an agent’s membership claim by cross-checking with the relevant CMPS (you
can do this online in minutes).

It’s
good practice

If an
agent gives you a blank look or the run-around when you ask about their CMPS
membership, alarm bells should ring.

A
good letting agent will have no trouble answering the question (and be
impressed by your industry knowledge).

An
agent who isn’t a member of a CMPS can be fined up to £30,000. Local
authorities, through their Trading Standards operations, enforce these rules.

From
all of us here at CWB Property, stay safe and thanks for reading.