For the first time, all letting agents will be able to get Client Money Protection, whether or not they are members of a recognised trade body or association.
It means that from now on, landlords and tenants will not necessarily have to look for a member of, for example, ARLA, NALS or RICS, to ensure that their money will be safe.
Yesterday, a new organisation called CM Protect launched. While it has the status of an organisation, this is purely to be able to offer the insurance at all – individual agents cannot take out their own insurance against the possibility that they may go bankrupt, misuse or run off with clients’ money.
It has been formed by the management team behind insurers Total Landlord Insurance and tenancy deposit scheme Mydeposits.
The sole purpose is to provide Client Money Protection insurance to letting agents who are not members of a recognised trade body or association yet wish to act responsibly.
Until now, belonging to one of these bodies was the only way for clients of letting agents to benefit from such protection.
CMP insurance protects the money of landlords and tenants against theft or misappropriation by the owners of a letting agent whilst it is in their custody or control. This could include tenants’ deposits and landlords’ rental payments, or funds held for repairs and maintenance to a property.
Reports of lettings agents starting up on the back of a poorly performing sales market and then folding, taking with them all their clients’ money, has had a damaging impact on responsible independent and smaller letting agents.
Eddie Hooker, chief executive of CM Protect Ltd, said: “There are many reasons why a letting agent does not feel it should be a member of an industry trade body, such as educational obligations, but they should not be prevented from accessing this valuable protection which demonstrates an upholding of responsibility to clients and provides the reassurance of a well-run professional agency.”
Ian Langley, pictured, director of operations for CM Protect, said: “We do not wish to compete with the industry trade bodies as we recognise the importance and value of these in raising standards and would always encourage larger agents in particular to uphold this.
“However, we feel that there is a void in the market and we want to encourage those smaller agents, who are currently not protected by CMP, to act responsibly without having to take on the commitment of a trade body.”
CMP insurance has to be provided by a body or organisation that is independent from the letting agent.
For this reason, CM Protect is establishing itself as a ‘membership’ body, but without ‘codes of conduct’ or other requirements. The benefit of CMP is only available to letting agents whilst they remain a member.
http://www.cmprotect.co.uk/
Comments
Not just an Ivory tower I'm planning on world domination! Seriously though, given ARLA's scope wouldn't it be nice if they were actually proactive instead of us just sitting by the phone?
No point in getting a wedgy until we hear from CM Protect and don't forget ARLA doesn't have a lock on how accountability is procured. Is it really a leap to suggest it could be similarly implemented by others?
Geezer I've never lobbied for control of the industry, ARLA have so I'm not best placed to ask what to do but there's no hiding the fact that something's up yet here we are, eating popcorn watching a silent movie.
Look this doesn't need subtitles, we share the same principles and we want the same things but whilst you wait for the last train home I'm going to keep it moving, taxi!
We both agree 'rent a cred' isn't the way and therefore exactly the same offering from the fortunately named company won't be either for the same reason; there is no 3rd party to answer to. Just as contents insurance doesn’t lesson the pain of burglary and doesn’t stop thievery, CMP and PI doesn’t do a thing to raise standards. With redress costing as little as £15 per office the situation is being created where there is officially sanctioned open season on honesty and the last defence of annual scrutiny is being removed. You actually don’t sound like the sort of bloke who condones that and are using this dialogue to make valid points at ARLA. If you were the new executive chairman of NFoPP what would you advise Ian Potter to do?
You say ARLA is mute and I agree we never hear from them other than possibly Mr Spode the other week (pottery ?) But is that simply because they haven’t worked out that instead of an Executive Chairman they really ought to have someone prepared to get down and dirty and go belly to belly with the likes of you; those who have valid points to raise but whose voice isn’t quite loud enough to be heard from outside the Ivory tower?
I'll go with catch 22 but what happens now, I mean the world keeps turning right? So they need cash to make the split but Rentify isn't the way to go, it's asinine to pimp membership and embarrassing; a truly sad day for the window sticker faithful.
Trust me brother I hear what you're saying and I have to admire your faith, but seriously as ARLA keep playing the mute and selling affiliation like some snake oil salesman so it'll continue to fragment. Lets not suffer them because the only honour and credibility associated with ARLA are from it's honest members, thats the constant and if they choose to acquire industry standards via committee it doesn't change that. Word's out now, no putting the genie back in the bottle...
ARLA haven't sent me to say or do anything.
Best you give up membership of ARLA, quit RICS and save yourself the few quid it costs you. Mate you are just being a provocateur who is as frustrated with ARLA and RICS as are large percentage of other members.
Susan, the new president, has confirmed ARLA are sticking with NFoPP so your frustration is justified, everything you say is correct.
Estate Agency and Lettings might require similar skill sets but as soon as there is money or management involved the two disciplines snap miles apart.
Quite obviously the individual NFoPP divisions would now struggle to function as separate units, each division has been so weakened each would struggle to survive without the economies of scale afforded by shared admin. Catch 22 for ARLA , it has to get away from NFoPP and re-establish the credibility even you acknowledge it had and while I agree the Halo has slipped it could very easily be pushed up to a Jaunty tilt if they had a mind too before this crowd and TPO undermine them any further.
Come on dude, Professional Indemnity the same as CMP? I think you know the difference so stop deflecting, drink the barium and show us what you're made of; do you or have you ever had CMP?
Yes, without proper independent audit CM Protect's offering is just a placebo but lets wait to hear what they have to say first. And, spin it may be but at it's core is client money protection so we can shoot the breeze about how and why money goes missing but as long as the client is covered then why waste the words. It is kind of funny though how the PR value is now 'lost', as though suddenly we can all expect a memo from ARLA to disguise it, as they still sell it and we still buy it; poison chalice indeed...
Look, I get that you only want affiliated access to CMP and I get why but everything you said in support is transferable. Sure you can argue the implications of using non members but most landlords haven't even heard of ARLA let alone CMP so given the prospect, its just an exercise in selective 'PR and spin'. The points you raise are better suited for debate with fellow agents because anything said in the living room is just to win business, remember lets keep this in the real world. If what's got you up on haunches is that member agents are accountable then really all we're looking at is whom we're accountable to and it doesn't have to be ARLA. Heck they don't even have a lock on implementing how accountability is procured.
Be honest, membership only carries cache with other members, any halo effect on the public has long since slipped. There's a certainty for erosion of more USP's and all the while an inept leadership that's just given up the fight, sending guys like you out to fight for them. Seriously, how are you not deafened by their silence? Maybe you just like staying in your lane, but don't kid yourself that only affiliation can provide.
Across the board NAEA, ARLA and RICS Agents are expressing the very same frustration as you; disillusioned, abandoned, disenfranchised, betrayed, let down are words commonly found on every Agents and Surveyors forum.
It is the lack of comment from the likes of Ian Mark or Peter on subjects like this that create that impression, it should not be left to Ex members to be pointing out the shear folly of this offering and the other similar firms which disguise the bad amongst the good.
For example if redress were only available through a trade body, necessitating adherence to a code of conduct and a minimum standard of competency, then a lot of the issues and bad press our industry faces would be controllable.
With CMP replaced by an ABTA style guarantee, same cost to agent, same cover, all of a sudden there is very good reason to belong to a trade body and ARLA could establish the public awareness reputation and respect ABTA has. CMP is not a bad thing but it is who is offering the protection that makes all the difference.
My views on CMP have not changed and actually I think CMP is merely a tax on those gullible enough or indirectly forced to buy it.
Sure CMP sounds impressive and on the grand scale of things doesn't cost a whole lot, but as you have pointed out now it is no longer a USP its PR value is lost. In reality CMP was only ever PR and spin. Professional indemnity is the insurance that matters; it does the same thing as CMP but covers factors outside your personal control. Effectively CMP was a cheap way of the trade bodies providing themselves insurance against errant members but it dressed up as something else and got the members to pay for it.
The reason why I could make mincemeat of any competitor who drops their membership of RICS and ARLA, (NALS is a consumer body not a trade body, UKALA haven't got any credibility or presence) is because it is not CMP that is the big benefit of the trade bodies ,it is the independent annual audit and code of conduct, the fact that the Principal of a business has someone to answer to.
Without the backing of a trade association your competitors can honestly say, Use XXX if you like, this is an un-regulated industry and anyone can set up and run a lettings business. Sure he/she has CMP but that only pays out if he/she goes out of business or steals money due to you or your tenants. Can you M.r/s/iss Llandlord honestly think of a logical reason why anyone who has to insure against the possibility of such a claim is worthy of your business?
This isn’t me being all protective of the trade bodies but an attempt at getting you to understand how this is possibly the most harmful thing you could do to your business.
Very often your best ally is the person who contradicts you and your worse enemy is yourself.
This must rate as the most sickening example of commercial opportunism ever witnessed in this sector.
Just like their TDP offering there will be the ability to 'un protect' when it suits?
Worst thing for the industry ever.
CMP just got a little easier so suddenly It's spoiled milk and anyone using it to win business is crazy even though affiliated members have been doing it forever? So I'm guessing members were sold and bought CMP by ARLA on 'Professional Indemnity insures against crooked staff' and ethics took a seat at the back of the bus? What about the affiliates exclusive monopoly of CMP, a little comment on their credibility wouldn't go a miss... Or is it that because it's no longer exclusive it's not worth having anyway, take all the time you need to juice those grapes…
CMP was here long before my post but somehow I think your view's kind of new, feel free to blow my mind but I don't see you saying the same thing to ARLA or it's members whilst you happily pay your premiums. Lets keep it in the real world, CMP's the same whether affiliated or not and given that rogue agents exist within ARLA too; you flatter to deceive. Unless you want CMP abolished, have never had it and totally disagree with the ethos of its conception then quit massaging the edges of this topic because its clear you're not the happy ending.
If you enjoy the bosom of membership then thats great but don't kid yourself that only then does CMP count. There's just as many honest agents doing great without ARLA as there are members that are disillusioned and feeling abandoned by them, I'll let you figure out which one I am.
Are you really saying you would abandon membership of whatever body you are currently affliated to in favour of a CMP only supplier?
The only protection seemingly on offer here is against you being bad at business or a thief. Are you really suggesting that is how you want to portray your business and self?
Given the nature of bad business people and crooks they are unlikely to take out insurance so why would anyone want to lower their credibility to such levels?
I can only think your post is from someone trying to generate a positive post in favour of what will be considered a gift horse objection to overcome when competing for instructions.
This is like one of those scenes on Dragon's Den where Peter Jones states the obvious to an embarrassed entrepreneur.
Professional Indemnity insures against crooked staff so any CMPscheme, not just this one, shouts out " You probably should not trust me, I don't even trust myself"
This is the white meat of affiliation so round of applause for getting right to it! No reason to be with those guys now so I'll leave them to Rentify!!!
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For goodneess sake! Is it national Baldric's cunning business model day today or what?
Good luck to the business and anyone who buys an insurance that should never, ever need.
I cannot wait to see the posts on this article and will delay comment until others have.
Meanwhile just two comments.
Presumably CM Protect will monitor this thread, so please advise what the premiums are.
Second yet more evidence that only one TDP scheme was ever needed (DPS) when the others go around doing things like this