How Does the Client Money Protection Scheme Work with PMC?
Are you a letting agent or landlord in the UK? Protecting client funds isn’t just ethical—it’s the law. Client Money Protection (CMP) is a legal requirement to safeguard landlords’ and tenants’ funds from fraud, mismanagement, or an agent going out of business. Failing to comply can result in fines of up to £30,000 and harm your reputation.
Key Factors of Client Money Protection?
In this article, you’ll discover everything you need to know about CMP, including:
By the end of this guide, you’ll clearly understand CMP, how to stay compliant, and how to ensure your clients’ money is always protected. Let’s begin!
What is Client Money Protection (CMP)?
Client Money Protection (CMP) is a reimbursement scheme designed to protect landlords and tenants if a letting agent misuses client money, whether through theft or financial collapse.
In short, if an agent goes bust or misappropriates funds, CMP ensures you can recover lost rent or deposits.
How to Claim Lost Money Through CMP?
If you suspect an agent has misused your funds:
CMP allows landlords and tenants to recover their money without lengthy court processes, ensuring financial security in the rental market.
What is Client Money?
Client money refers to any funds received, held, or managed by a business on behalf of a client. The property sector typically includes rent, deposits, and service charges handled by letting agents, property managers, or estate agents on behalf of landlords and tenants.
Examples of Client Money in Property Management:
Tenant deposits
(held before or during a tenancy)
Rent payments
(collected by an agent on behalf of a landlord)
Service charges
(for property maintenance)
Refundable fees
(e.g., holding deposits).
Secure Your Clients’ Funds with CMP Today
Don’t risk fines or damage to your reputation. Join a government-approved Client Money Protection scheme now and build trust with landlords and tenants. Contact us to get started!
Who Needs Client Money Protection (CMP)?
CMP is legally required for businesses that handle client funds in the property sector. This includes:
Letting Agents
Agents who collect rent, deposits, or service charges on behalf of landlords.
Any letting business that holds client money must be registered with an approved CMP scheme.
Property Management Companies
Businesses that manage rental properties and handle client funds for maintenance, service charges, or rent collection.
Estate Agents Handling Rental Payments
If an estate agent deals with lettings and holds client money, they must comply with CMP regulations.
Landlords Using Letting Agents
While landlords themselves don’t need CMP, they should ensure their letting agent is CMP registered to protect their funds.
Legal Requirement in the UK
Since April 2019, all letting and property management agents handling client money in England must be part of a government-approved CMP scheme. Failure to comply can result in fines of up to £30,000.
Tenancy Deposit Holders
Agents holding tenancy deposits must be CMP registered to ensure full financial protection for both landlords and tenants.
How to Get Client Money Protection (CMP)?
If you’re a letting agent or property management company in the UK, you must register with a government-approved CMP scheme to comply with the law. Here’s how you can get CMP for your business.
Approved CMP Schemes in the UK
The UK government has approved several CMP schemes that letting agents to join. Below are the official providers:
Propertymark Client Money Protection
UKALA Client Money Protection
Client Money Protect
Money Shield
RICS Client Money Protection
Steps to Apply for CMP
Applying for CMP is simple, but you must meet specific requirements. Follow these steps:
Choose an Approved CMP Scheme
* Research each scheme’s benefits, costs, and eligibility requirements.
* Select the one that best fits your business needs.
Gather Required Documents
* Business details (company name, registration number).
* Financial records (bank statements, proof of client money account).
* Insurance details (Professional Indemnity Insurance, if required).
Submit Your Application & Pay Fees
* Complete the online application form for your chosen CMP scheme.
* Pay the membership fee (varies by provider, typically £200-£500 per year).
Receive Certification & Stay Compliant
* Once approved, you’ll receive a CMP certificate.
* Display your CMP membership details on your website, office, and client agreements.
* Stay compliant by renewing your membership annually.
What Do CMP Schemes Require for Membership?
Each CMP scheme has its own membership rules, and agents must follow their chosen scheme guidelines. These can usually be found on the scheme’s official website.
Common Requirements
General Requirements for All Schemes
Before applying, agents should review all requirements carefully and ensure they meet the rules of their chosen scheme.
What Happens If You Don’t Have CMP?
Failing to comply with CMP regulations can lead to severe penalties for letting agents, property management companies, and those offering letting services. Here’s what could happen if you operate without a valid CMP scheme:
Heavy Fines – Up to £30,000
Since 1st April 2019, letting agents in England who handle client money without CMP can face a fine of up to £30,000 from Trading Standards.
Additional fines, almost £5,000, may apply if an agent fails to display their CMP certificate correctly.
Risk of Losing Your Letting Agent License
Operating without CMP could lead to your agency being banned from trading.
Local authorities and regulatory bodies may revoke your business license.
Legal Action from Landlords & Tenants
Landlords and tenants can take legal action if client funds are lost or misused.
Without CMP, an agent may be forced to repay lost money out of pocket or face court proceedings.
Reputation Damage & Loss of Business
Tenants and landlords trust CMP-certified agents to protect their money.
Lack of CMP damages credibility, making it harder to attract clients.
Negative reviews and legal disputes can permanently harm your business reputation.
CMP Is Mandatory & Essential
If you’re a letting or property management agent, having a CMP scheme is not optional, it’s a legal requirement. Avoid fines, protect your business, and gain trust by getting CMP certification today.
How to Check If a Letting Agent Has CMP?
Before trusting a letting agent with your money, it’s essential to ensure they have CMP. Here are some simple ways to check:
Ask for Their CMP Certificate
All CMP-registered agents must display their certificates in their offices and websites. If you don’t see it, ask them to provide a copy.
Check the Government Register
The UK government keeps a list of approved CMP schemes. You can search online or check with Trading Standards to confirm if the agent is registered.
Contact the CMP Provider
If the agent says they are part of a CMP scheme but you’re not sure, visit the scheme’s website (e.g., Propertymark, UKALA, or Client Money Protect) and search for their membership.
Look for the CMP Logo
CMP-registered agents usually display a logo on their websites. If you can’t find one, ask them about their membership.
Report Agents Without CMP
If an agent handles client money but isn’t registered, they are breaking the law. You can report them to Trading Standards, and they may face a fine of up to £30,000.
Frequently Asked Questions
Client Money Protection (CMP) is a legal requirement for letting agents in England. It ensures that landlords’ and tenants’ funds are safe.
Without it, agents face fines, legal action, and loss of trust. To stay compliant, agents must join an approved scheme, display their membership, and follow financial regulations.
Protecting client money isn’t just a rule; it’s essential for a trustworthy rental market.