Letting agents across the country are responsible for handling huge sums of money, it's estimated they hold around £2.7 billion of clients’ funds at any one time. To protect this money, Client Money Protection (CMP) exists to give landlords and tenants peace of mind.
Why CMP is so important
Since April 2019, all letting agents in England who handle client money are legally required to be part of a government-approved CMP scheme. Agents who don’t comply can be fined up to £30,000.
Before it became law, only around 60–80% of agents were signed up voluntarily. Now, it’s a legal obligation and a crucial layer of protection for landlords and tenants.
How does CMP work?
CMP is a safety net. If a letting agent goes bust or deliberately misuses client money, you can claim back lost rent, deposits, or repair funds through the CMP scheme without needing to go to court.
To make a claim, you’ll need to:
- Report the issue to the police
- Submit a claim to the agent’s CMP provider within 12 months
- Provide evidence, such as:
- The tenancy agreement
- The agent’s Terms of Business
- Bank statements showing a history of payments
- Proof from tenants that rent was paid
Real life example
Cases like Manish Manek, a rogue agent who stole £47,000 in rent and deposits, highlight the importance of CMP. Despite being jailed, his victims never recovered their losses because there was no protection in place.
What does CMP cover?
CMP protects various types of client money, including:
- Rent payments
- Deposits (while held by the agent before/after tenancy deposit protection)
- Service charges
- Funds for property repairs
- Arbitration or legal fees
CMP doesn’t replace tenancy deposit protection (TDP) schemes. It only covers deposits while the agent holds them, not once they’re in a TDP scheme.
Do all agents need CMP?
If an agent doesn’t handle client money for example, if tenants pay rent directly to the landlord, then CMP isn’t required. However, if they do manage funds, CMP is mandatory.
How to check if an agent has CMP
Every letting agency must display its CMP certificate clearly in branch and on its website. Before signing anything or handing over money, make sure to ask:
- Are you part of a government approved CMP scheme?
- Who provides your cover?
At Propertymark, our CMP scheme protects up to £15 million per year (or £35 million for large corporate members), with a maximum claim limit of £50,000 per case. We also inspect our members’ accounts annually to ensure everything is in order.
CMP gives you a vital layer of protection when working with letting agents. Don’t take the risk always check that your agent is covered before handing over any money.
