KPM | Client Money Protection

Chartered Surveyors

THE Letting Agent for 'Accidental' and Expat Landlords

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Chartered Surveyors

Client Money Protection: Making Sure Your Agent Doesn't 'Accidentally' Use Your Funds for a Luxury Holiday

If you're considering renting out your property, you might be concerned about the risks involved, particularly around financial security with your letting agent.

Thankfully, Client Money Protection (CMP) is here to put those worries to rest.

CMP is designed to protect your funds if anything goes wrong with your agent, such as mismanagement or unexpected business closure.

And this isn’t just a nice-to-have safeguard; under the Housing and Planning Act 2016, it’s a legal requirement for all letting agents in England to have CMP in place.

In practical terms, CMP ensures that any funds held by your agent - whether yours or your tenants'- remain secure, giving you peace of mind and confidence in your letting arrangements.

With CMP, your investment is protected, so you can rent out your property with less worry.

Why is Client Money Protection Important?

CMP provides peace of mind to landlords and tenants that their funds are safe when they use a letting agent.

In the unlikely event that a letting agent goes out of business or misuses funds, landlords and tenants can make a claim against the CMP scheme that the letting agent is a member of.

This ensures that your money is protected, and that you can recover any losses incurred.

Client Money Protection Certificate for Knight Property Management

Knight Property Management is a member of the RICS Client Money Protection Scheme.

Which Letting Agents Need to have Client Money Protection?

All letting agents in England who handle client money must have CMP. This includes agents who:

Rent out residential property
Manage residential property
Arrange tenancies or collect rent

Letting agents must also display the details of the CMP scheme that they are a member of in their office and on their website.

How Does Client Money Protection Work?

Letting agents must join a CMP scheme that is approved by the government.

There are several CMP schemes available, and letting agents can choose which one to join.

The CMP scheme will provide a certificate of membership to the letting agent, which they must display in their office and on their website.

If a letting agent goes into administration or misuses client money, landlords and tenants can make a claim against the CMP scheme.

The scheme will investigate the claim and pay out compensation if necessary.

The maximum amount of compensation varies depending on the scheme, but it is usually between £25,000 and £50,000.

Conclusion

As a landlord, it is important to ensure that the letting agent you use is a member of a CMP scheme, and to check their certificate of membership.

This will give you peace of mind that your funds are protected in the event of the letting agent going into administration or misusing funds.

By understanding the concept of CMP, landlords and tenants can make informed decisions when choosing a letting agent.

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