As of April 1st 2019, any agent who holds client money on behalf of someone else in the course of their business must be signed up to a client money protection scheme.
Understandably we have had a number of queries in relation to this recently and a lot of them revolve around the requirements of membership and where to sign up.
At the time of writing there are six schemes available to sign up to –
- Client Money Protect
- Money Shield
- TheNational Approved Letting Scheme
- UK Association of Letting Agents (UKALA) Client Money Protection
- RICS Client Money Protection
Agents will need to comply with the membership rules for the scheme they have chosen. This will include requirements to have a separate client money account that is held in an FCA regulated account.
A number of members have raised concerns that they could not meet the additional requirements around getting an FCA regulated client money account by April 1st 2019.
In these instances, agents should speak to their chosen scheme and ask them if they will accept they are making all reasonable efforts to have a client money account set up.
The Tenant Fees Act 2019 amended the CMP regulations to allow each scheme to amend their rules so that their members may be making all reasonable efforts to have a client money account in place.
This relaxed approach to the requirement to have a client money account will only last until April 1st 2020 however, so agents should continue to try getting everything in place as quickly as possible.
Learn more about Client Money Protection
- Read more about Client Money Protection in our online guide here