What is Client Money Protection for landlords?

Since 1 April 2019, all letting agents in England have been required to belong to a client money protection scheme when they are holding client money on behalf of landlords or tenants. This regulation aims to provide financial protection to landlords who entrust their rental income and funds to letting agents. This guide will inform landlords about these regulations, the importance of client money protection and the available insurance schemes that ensure agents can be trusted with their money.

Understanding Client Money Protection

Client money protection regulations specifically apply to letting agents, not landlords themselves. In many cases, letting agents manage multiple landlords, each with their own portfolio of rental properties. When tenants pay their rent, the letting agent receives the funds, which rightfully belong to the landlord. It is in this context that the regulations come into play, ensuring that the letting agent safeguards the landlord’s money.

The importance of CMP

As a landlord, it is vital to understand that these rules exist to protect your financial interests. By requiring letting agents to be part of client money protection schemes, you have added reassurance that your rental income and funds are in safe hands. These schemes provide insurance coverage in case the agent misappropriates or unlawfully uses your money. In the unfortunate event of theft or fraud by the agent, the insurance provided by these schemes will help safeguard your finances.

Available Insurance Schemes

To ensure the trustworthiness of letting agents handling client money, various insurance schemes are available. These schemes include:

Membership requirements for letting agents

Each scheme has its own set of rules and requirements for membership, which can be found on their respective websites. For example, letting agents may need to provide three months of bank statements for their client accounts. It is essential for agents to thoroughly familiarise themselves with the membership rules of their chosen scheme and comply with all requirements. Additionally, agents must have appropriate client money handling procedures in place, maintain professional indemnity insurance, and hold the client money in a separate client account regulated by the Financial Conduct Authority.

Transparency requirements

Letting agents are obligated to inform their clients about their membership in a client money protection scheme. They must prominently display a copy of the certificate indicating their scheme membership on their website. Moreover, agents must display a copy of their membership certificate in each of their offices, in a visible location easily accessible to clients. If requested, agents must provide a copy of the certificate to clients free of charge.

Switching schemes or loss of membership

If a letting agent decides to switch schemes, allows their subscription to expire, or is expelled from a scheme, they must notify all their clients in writing within 14 days.

Verifying scheme membership

As a landlord, you can verify whether your letting agent is a member of a client money protection scheme by checking the scheme’s searchable database on their website or contacting the scheme directly.

Enforcement and penalties

Local authorities are responsible for enforcing compliance with client money protection requirements. Penalties may be imposed for non-compliance, including failure to meet transparency requirements or failure to belong to a scheme. Agents found in breach of these regulations may face fines of up to £5000 for transparency requirement breaches and fines of up to £30,000 for failure to belong to a scheme.


Client money protection regulations exist to safeguard the financial interests of landlords and tenants. By choosing a letting agent who is a member of a client money protection scheme, you can have confidence that your rental income and funds are adequately protected. Familiarise yourself with the available insurance schemes and ensure your letting agent complies with the necessary requirements, providing you with peace of mind.

Addressing these complexities and ensuring compliance with CMP regulations can be effectively handled with the assistance of a reputable letting agent. At Dreytons, we understand the intricacies involved in protecting landlords’ financial interests.

In addition to providing comprehensive support in navigating CMP regulations, we offer an additional advantage. Our guaranteed income service ensures that landlords receive rent every month for a period of one to five years. From securing reliable tenants to managing all the necessary paperwork, we handle the entire process, freeing landlords from the associated hassles.

By entrusting your property to us, you can rest assured that your investment will start generating income swiftly. Our dedicated team at Dreytons is committed to assisting landlords in complying with CMP regulations while maximising their financial returns.

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