CMP Could be Mandatory for Letting Agents in just 2 Weeks

Key provisions relating to mandatory Client Money Protection (CMP) for letting agents, as published by the Government in February, come into force today.

They allow the Secretary of State to pass regulations, meaning that letting agents could have to offer CMP from as early as 1^st April 2018 – just two weeks away.

Exact details of when and how the system will work are yet to be confirmed.

However, Tim Frome, the Associate Director of Hamilton Fraser, says that regulation is imminent, and will affect letting agents, relocation agents and property managers across England.

He explains: “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 funds of landlords and tenants against theft or misappropriation by the owners of a letting agency while they are in their custody.

This could include monies such as tenants’ deposits and landlords’ rent payments, or funds held for repairs and maintenance of a property.

Agents that are members of an accreditation scheme are likely to already have CMP.

Lord Palmer of Childs Hill, who co-chaired the consultation committee on compulsory CMP, alongside Labour’s Baroness Hayter, adds: “I expect the regulations to be finalised and released very shortly.”

Failure to join a scheme is likely to be enforced by financial penalties, which will be levied by local authorities or Trading Standards.

Letting agents are advised to stay on top of the law and consider joining a CMP scheme ahead of the enforcement of the upcoming regulations.

Landlords and tenants, remember to always use an accredited letting agent.