Client Money Protection
The Government has been improving the standards of Residential Letting & Property Management agents throughout England by introducing legislation over recent years, one such piece of legislation is the introduction of compulsory Client Money Protection.
Parks has been a regulated and licensed member of Propertymark since 2004, which already required its members to be audited, hold Client Money Protection (“CMP”) for all clients’ money and have professional indemnity insurance.
A Government consultation paper published in March 2017 found that only 60% of Residential Letting Agents protected landlord and tenants money by ring fencing and protecting their clients’ deposits and rents from misappropriation through Client Money Protection. The consultation does recognise that it will be small agents and, particularly new entrants to the market, who are likely to be most significantly affected by the new law.
The Housing and Planning Act 2016 has introduced the latest regulation for all Residential Letting Agents in England to have mandatory Client Money Protection (“CMP”) from the 1st April 2019. Compulsory membership of a client money protection scheme will be implemented and enforced by the Trading Standards Authority and will affect all Residential Letting and Property Management Agents who collect and hold clients funds.
In addition to CMP, the Government has proposals to regulate all Residential Letting and Property Management Agents. Mandatory regulation of agents will provide certainty for the quality of services being providing by the sector backed by full government regulation.
On Tuesday 26 February 2019, Propertymark received formal Approval from Housing Minister, Heather Wheeler MP, to operate a Government-authorised Client Money Protection (CMP) Scheme.
To read more on this topic, refer to our regulatory body, Propertymark by clicking here
Under the regulations, agents are also required to have their Client Money Handling Procedures on their websites and, at a client’s request, also available in a hard copy format, free of charge. As a Propertymark Protected firm, our Client Money Handling Procedures are covered in Propertymark’s Conduct and Membership Rules. Propertymark’s Rules are available here.