The Client Money Protection (CMP) Scheme is a compensation scheme that provides compensation to landlords, tenants and other clients should an agent embezzle their rent, deposit or other funds.

Clients’ money is any money held and recieved by an agent that doesn’t strictly belong to the agent. This could include rent held on behalf of a landlord or a tenant’s security deposit for a property. The law states that client’s money must be kept in a separate, dedicated bank account and stay in that account whilst it is being held in trust by the agent.

Most of the main letting agent trade bodies or organisations, such as UKALA, RICS, NALS and ARLA, offer CMP insurance. These trade bodies provide insurance to their members, publicise the numerous benefits of being part of a scheme, and deal directly with any claims made against the insurance.

Although it is wise for landlords, tenants and other clients to check that agents are part of a CMP scheme, it does not offer a 100% guarantee to landlords and tenants. The guarantee only extends to loss by theft of client monies by the owners of the business.

Since May 2015 it has been a legal requirement for letting agents to display fees along with details of the redress scheme they belong to and membership of a CMP scheme, where appropriate. The industry is currently campaigning for CMP to be a mandatory requirement for all letting agents, giving landlords and tenants’ extra peace of mind that they are properly protected should anything go wrong.

To find out more visit Safe Agents website now.