Landlords at risk by choosing agents without CMP

14/02/2020

Many Landlords are unaware of the legal requirement for their Letting Agent to be registered with a Client Money Protection (CMP) Scheme, and are therefore putting themselves at financial risk.

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In April 2019, it became mandatory for all agents in England dealing with residential lettings to be registered with an appropriate CMP Scheme. The legislation was introduced to help tackle rogue Landlords and ensures that client money - such as rents and deposits - are properly protected.

CMP is a reimbursement scheme designed to safeguard funds in the event that an agent misappropriates the rent, deposit or other client money. Should the letting agent behave roguishly or go into administration, tenants and landlords will be able to get their money back.

The legislation has been created to ensure that agents deal with client money in a proper and responsible way. It does this by making sure that all agents hold client money in a Financial Conduct Authority authorised account and also that they hold and make available their certificate confirming membership of a CMP scheme.

CMP schemes have been around for some time and Let Leeds has been a longstanding proponent of making this a mandatory requirement by the government.

However, despite being law for nearly a year, there are still a number of agents that continue to operate without CMP in place. The danger is that a lot of Landlords remain unaware of the law at and also implications of using an agent without it

"A great number of Landlords are still unaware of the risks" says Let Leeds MD, Luke Gidney "If they use an agent that isn't a member of a CMP scheme, and they go under or close, the Landlords have no protection at all."

As well as being mandatory to belong to a scheme, it's also a legal requirement under The Consumer Rights Act 2015 to clearly display their membership to one. You can find the Let Leeds CMP certification in the footer of our website, or simply click here.

"If you are a Landlord considering which agent to work with, it is essential that you check for certification on their website to prove they have CMP in place before you move ahead. Not only to protect yourself from an unscrupulous agent running off with your cash, but also as more and more agencies are at risk of administration and sudden closure since the introduction of the Tenant Fee Ban last year."

An agent can have CMP provided by a number of different bodies and Let Leeds is proud to be Propertymark protected.

If you are an existing Landlord with any queries about CMP, please contact your Property Manager or if you like to find out more about how Let Leeds can manage your property, please click here to book your face to face appraisal with our experts.

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