NEWS FLASH: Minister confirms CMP will become mandatory
Letting agents across the country will soon be required to protect rental monies through an approved Client Money Protection (CMP) scheme, following the recommendations made in a new Government report published this week.
TPO was one of several industry organisations called to provide evidence for the working party, which was chaired by Baroness Hayter and Lord Palmer of Childs Hill.
The Housing Minister has now confirmed that agents will be required to protect the client money they handle. Announcing his decision on Twitter, Gavin Barwell MP said the government will consult on details shortly, before posting a link to the CMP report.
Lord Best, TPO’s Council Chair, expressed his support for the news and the Government is due to publish further details shortly.
Gerry Fitzjohn, Board Chairman said:
“We would like to thank all the TPO agents that took part in the CMP survey we carried out last year as part of the Government’s CMP review. TPO’s survey ensured the industry had a voice during the review. While the survey results confirmed that a number of TPO agents already have CMP cover in place, we hope this news paves the way for the industry to finally have a level playing field so every consumer can be assured that their agent has CMP cover in place.
Gerry added: “If you do not have CMP cover in place, now is the time to review your options. Agents can contact their trade bodies to find out what cover they can provide and Lonsdale was one of the first insurance brokers to offer CMP cover to agents that do not belong to a trade body, which has developed an exclusive product for TPO agents.”
What does this news mean for agents?
The Government launched the CMP working group last autumn and this week’s report recommended that CMP becomes mandatory for letting agents in England that handle client money.
It’s important that agents take note of the existing legislation that already makes it a legal requirement for agents to disclose whether or not they have CMP cover.
If you do not have CMP cover in place, now is the time to review your options (see below).
Current legislation requires letting agents to display whether they have CMP or not. Trading Standards officers have enforcement powers and can fine agents a civil penalty of up to &5,000 (payable to the council) for each office where the information is not published. There will also be a fine of up to &5,000 if the information is not published on an agent’s website.
How can I find out more about CMP cover?
CMP cover is available through a number of providers - agents can access cover through their trade association or Lonsdale, which was one of the first insurance brokers to offer CMP cover to agents that do not belong to a trade body.
TPO has an exclusive agreement with Lonsdale, which offers TPO members comprehensive Professional Indemnity Insurance and Client Money Protection. Further information on the PI + CMP scheme can be found by clicking here.
• Check your office and website: are you displaying your CMP cover?
• Disclose your CMP cover: the more you talk about CMP, the more informed landlords and tenants will become so they can scrutinise rival agents that have yet to sign up and are failing to protect client funds.
• Brief colleagues and clients: If a consumer asks, does everyone in your team know if your business has CMP cover? Please make sure your staff are aware that CMP goes beyond deposit protection – it offers additional safeguards and gives landlords with the peace of mind that the rent collected by their agent is protected from fraud and unlawful use.
• Research the CMP providers identified above and please look out for future updates concerning mandatory CMP cover.
To view the Government’s CMP report, please click here.