Client Money Protection Insurance (CMP)
CMP is an insurance product for letting agents. CMP protects the rental money that a tenant pays their letting agent to pass onto a landlord. Few landlords or tenants are aware of CMP and how it can safeguard rental money if an agent attempts to use client funds fraudulently.
However, the Government has now confirmed that it plans to make CMP mandatory for letting agents, following an official review which TPO contributed to in 2016. A consultation is due to take place in 2017 before the Government makes CMP a legal requirement.
CMP insurance cover is available through several providers (see below) and we urge agents to review the options available to them and ensure they have their cover in place before CMP becomes a legal requirement.
Did you know? Under current legislation, the Consumer Rights Act 2015* made it a legal requirement for every lettings agent in England to display whether or not they are a member of a Client Money Protection scheme. Letting Agents in Wales are required to be a member of a Client Money Protection scheme (and display this to consumers) as part of their Rent Smart Wales registration.
Trading Standards Officers have the enforcement powers to impose fines of up to £5,000 for any firm that fails to display this information.
* The legislation also requires agents to display their lettings fees and which redress scheme they belong to. Failure to do so, could result in a £5,000 fine being enforced by Trading Standards.
Agents that belong to a trade body
CMP is available through several providers. Agents that belong to an industry trade body may already be covered. The following trade bodies offer comprehensive CMP cover to their member firms: ARLA, RICS, UKALA and NALS.
Agents that do not belong to a trade body
TPO has an exclusive agreement with Lonsdale, which offers TPO member agents a comprehensive Professional Indemnity Insurance and Client Money Protection policy. The ‘PI+CMP’ policy was developed exclusively for TPO member agents - to find out more about the benefits of the Lonsdale cover, please contact:
Tel: 020 3713 3860
N.B. Lonsdale Insurance Brokers offer a combined Professional Indemnity (PI) and CMP policy. (Please note: if an agent is unable to cancel their existing PI cover Lonsdale can offer CMP only until their PI is due for renewal)