Client Money Protect has gained formal government approval to operate a client money protection scheme when the regulations go live on April 1 - the first operation to win official backing.
From April 1 it will be mandatory for all letting agents and property managers in England to be a member of an approved client money protection scheme or face fines and sanctions for non-compliance.
Client Money Protect, part of the Hamilton Fraser group of companies, will be aimed at small to medium sized operators that hold less than £5m client money and prices will start at £350 plus VAT.
Professional indemnity insurance, crime and directors and officers insurance can also be added to the membership.
“As administrators of a CMP scheme since 2014, which enabled agents to join on a voluntary basis, we are proud to have been approved to continue providing CMP under the new legislation” says Eddie Hooker, Hamilton Fraser’s chief executive.
“In an increasingly regulated industry in which landlords are feeling the strain, this will offer some positive news in landlords’ and tenants’ favour. Tenants’ deposits will remain covered by the deposit protection schemes, but CMP will act as a backstop should there be an issue” he adds.
And Paul Shamplina - founder of Landlord Action and brand ambassador for Hamilton Fraser - adds:“Having dealt with too many cases where landlords and tenants have fallen victim to rogue letting agents who have misappropriated their money, I have long championed this move for our industry. However, the challenge of educating consumers to understand the importance of ensuring their agent holds CMP will continue, but hopefully this will raise awareness and standards.”