Client Money Protection (CMP) Explained


The Client Money Protection Scheme (CMP) is designed to provide compensation for landlords and tenants when rent, security deposits or any client funds are misused or misappropriated. Since 2009, all property agents in England are required to be part of the scheme, yet every year unprotected landlords and tenants lose money when funds are used incorrectly. 


How Does CMP Work? 

Put simply, the scheme means your money is protected should an agent go out of business or commit theft. Any claim will have to go through the courts, however, and proof that funds have been misappropriated will be required. Firstly, the police should be informed if any funds have gone missing and make a claim to your CMP provider within twelve months. 


You’ll ordinarily be required to provide your tenancy agreement, terms of business, bank statements that prove payments were followed by non-payments, and the tenants bank statements to show rental payments have been made. 


What Does CMP Cover? 

The good news for landlords is that CMP covers a range of different factors like rent, service charges, arbitration fees and repair funds. A tenant’s deposit must be placed in a Tenancy Deposit Scheme (TDP) to ensure their money is protected. 


The current TPD law means the recent changes to CMP legislation only need to cover a deposit whilst it’s with the agent, during the time it’s not secured by the TDP scheme. If rent is paid directly to the landlord, agents are still able to trade without CPM.


CMP Schemes Approved by the Government 

It’s compulsory for all agents to be part of the CMP scheme, but before a tenant makes any kind of payment or confirms the terms of an agreement, it’s important they check the agent's CMP certificate. Agents need to display their certificate on their website or in their branch.   


Reliable CMP schemes include Money Shield, Propertymark, Client Money Protect and RICS. Others are UKALA and Safeagent. All are trusted and highly reputable.


CMP for Crown Home Buying & Letting

LinkedIn Crown Home Buying & Letting

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