This week the Government have announced new measures to make Client Money Protection (CMP) mandatory for all letting agents across England – a great step forward for the industry!
What is Client Money Protection?
Agents who use a client money protection scheme ensure that money paid by landlords and tenants which needs to be held, is kept separately from operating funds. This means that in the event of an agent having financial difficulties and going under, or other rare money handling issues, a claim can be made directly to the CMP scheme and no money is lost.
That sounds great, so why isn’t it mandatory already?
This announcement has been a result of a campaign which has lasted for over two years led by ARLA (The Association of Residential Letting Agents), Baroness Hayter and Lord Palmer – the industry has been actively seeking it!
Professional agents will have been protecting client money for years – Northfields have been a member of NALS (National Approved Letting Scheme) since 2001, and they offer CMP to all of their members.
We also use Veco software to ensure we manage client money correctly and are fully accountable to those for whom we hold funds.
As the industry is unregulated, anyone could start a lettings business without taking into any consideration the hundreds of pieces of legislation they need to adhere to in order to provide a safe, fair and trusted service.
This legislation is most welcome because it’s a step towards a more equal and regulated industry – a benefit for professional agents who have been setting this standard for years, and a benefit to landlords and tenants as they can be sure that whichever agent they choose to use, their money will be protected.
If you have any questions about CMP or any of the other ways we keep up-to-date and compliant with all legislation, please give us a call and speak to one of our team on 020 8740 6622 – we give our clients peace of mind!