Agents Must Have Client Money Protection From 1 April 2019

The Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019 have been approved and will commence on 1 April 2019.

The regulations apply to property agents operating in the course of English letting agency or property management work (and therefore only apply to England).

Which Agents Must Hold Client Money Protection?

The term property agent is used in these regulations to cover both a letting agent and property manager, as found in sections 54 and 55 of the Housing and Planning Act 2016.

Letting Agent

"Letting agent" means a person who engages in letting agency work (whether or not that person engages in other work) but does not include an employee of an agency. "letting agency work" means things done by a person in the course of a business in response to instructions received from—

  • a person ("a prospective landlord") seeking to find another person to whom to let housing, or
  • a person ("a prospective tenant") seeking accommodation to rent.

Letting agency work does not include the following things if they are the ONLY things the agent does and nothing else:

  • publishing advertisements or disseminating information
  • providing a means by which a prospective landlord or a prospective tenant can, in response to an advertisement or dissemination of information, make direct contact with a prospective tenant or a prospective landlord
  • providing a means by which a prospective landlord and a prospective tenant can communicate directly.

Property Manager

"Property manager" means a person who engages in English property management work but does not include an employee of an agency. "English property management work" means things done by a person in the course of a business in response to instructions received from another person ("the client") where—

  • the client wishes the person to arrange services, repairs, maintenance, improvements or insurance in respect of or to deal with any other aspect of the management of premises on the client's behalf, and
  • the premises consist of housing in England let under a tenancy.

The requirement to Belong to a Client Money Protection Scheme

Therefore, if the agent is a letting agent performing letting agency work or a property manager performing property management work in England and they receive money which is held on behalf of another person, they will be known as a regulated property agent and belong to an approved or designated client money protection scheme is required from 1 April 2019. Client money means money held on behalf of another person but does not include money held by an authorised tenancy deposit scheme. Although each scheme may vary as to requirements to join, generally, the following will be required (taken from CM Protect):

  • A segregated client money bank account authorised by the FCA
  • Three months' bank statements from your client account(s) showing all client money transactions for deposits and rents
  • Appropriate professional indemnity insurance for the size of the firm
  • Membership in an external consumer redress scheme (which is a legal requirement anyway)
  • Membership in a tenancy deposit protection scheme, including a summary of current live protections
  • To agree to abide by the Scheme Rules, including the client money handling conditions

Available Schemes

Any scheme the agent becomes a member of must be an approved or designated client money protection scheme under The Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018

Client Money Protect was the first to be approved under regulations. The government has issued guidance for letting agents, including a list of approved schemes.

Display of Certificate

If the scheme provides a certificate of membership, the agent must:

  • display the certificate where it's likely to be seen at each of the agent's premises in England, where the agent deals face-to-face with persons using or proposing to use the agent's services
  • publish a copy of the certificate on the agent's website (if any); and
  • produce a copy of the certificate to any person who may reasonably require it, free of charge.

Display of Fees and Changes to the Consumer Rights Act 2019

The Tenant Fees Act 2019 changed the Consumer Rights Act 2015 regarding what must be contained on the list of fees and how it's displayed. 

Where a letting agent advertises the property for rent on a third-party website (such as on Rightmove, Zoopla etc.) or advertises letting agency work carried on by the agent (such as promoting their services as sponsorship), the agent must ensure that:

  • a list of the agent's relevant fees is published on the third-party website, or
  • there is a link on that website to a part of the agent's website where a list of those fees is published.

It may seem strange that a list of fees must still be displayed when the Tenant Fees Act effectively bans them. However, there will remain landlord fees which must continue to be displayed. 

Under the Consumer Rights Act 2015, the list of fees must contain details of the redress scheme the agent is a member of and the position if the agent holds client money protection and details of the scheme. Of course, being a member of the client money scheme will be mandatory, so changes are made accordingly. 

From 1 April 2019, when the agent is required to be a member of a client money protection scheme, the list of fees must also include a statement that:

  • indicates that the agent is a member of a client money protection scheme, and
  • gives the name of the scheme.

The requirement to Notify Clients

If the agent's membership in a scheme is revoked or the agent changes to a different scheme, the agent must notify each client in writing with that information within 14 days of the event.

If the notification relates to changing a scheme, the notification must include the name and address of the new scheme. For more specifics of the definition of "client", see regulation 4(4).


Local authorities must enforce the regulations. The authority may impose a financial penalty for a failure to hold membership in a scheme up to a maximum of £30,000. 

Regarding failing to display the certificate or notify clients, a penalty of up to £5,000 may be imposed. 

Before imposing a financial penalty, a local authority must notify the agent of its intention to do so (a “notice of intent”). 

The notice of intent must be served before the end of 6 months, beginning with the first day the authority has sufficient evidence of the breach. 

The property agent may make written representations to the local authority within 28 days. 

After 28 days, the local authority must decide whether to impose the proposed penalty and, if so, serve a final notice. 

A property agent who disagrees with a final notice may appeal to the First-tier Tribunal within 28 days of the final notice being served. 

If a property agent fails to pay a financial penalty, it is recoverable as though it were an order of the county court.

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