On 1 April 2019 Client Money Protection (CMP) will become mandatory for all letting agents.
Government are currently are considering applications from operators who wish to become Client Money Protection Schemes. Once approved, the chosen schemes will administer CMP for letting agents, to protect the client money they hold. As a long-standing client money protection scheme operator, NALS has applied for formal recognition from Government as an approved scheme.
Isobel Thomson, CEO, NALS said:
“There’s been a great deal of discussion about Client Money Protection schemes over the last few days and as an existing CMP scheme operator we understand the importance of reassuring agents who may be concerned by the doomsday scenario being presented by some providers seeking to force changes in the proposed mandatory CMP requirements.
“Forecasting scheme closure and the dangers to landlords and tenants of agents having to operate unlawfully because they can’t get CMP isn’t helpful.
“For the past five years, NALS has been the only CMP scheme in the marketplace which recognises that those agents who place deposits in a custodial deposit scheme should pay less for their annual CMP contribution as they hold less in their client account. This is a fair and transparent method of pricing.
“No scheme has been approved by Government yet, but when they are, large firms can shop around for the best deal they can get for CMP cover. Those firms must appreciate however that instead of holding for example £100m in deposits in their client accounts they can place them in a custodial scheme and pay appreciably less for CMP. It will be their choice.
“Recent statements by some existing operators that large businesses will not be able to obtain CMP cover in the current insurance market assumes that all operators are facing the same problem. That is not the case.
“NALS will continue to engage with Government on this issue.”
** NALS administers the SAFEagent campaign which launched in 2011. On 1 April 2019 the campaign will have achieved its objective for mandatory client money protection for all letting agents, thanks to the support of agents large and small who were determined to ensure this consumer measure was introduced for the benefit of landlords and tenants**