Compulsory CMP to Come into Force Before Lettings Fee Ban
By |Published On: 4th April 2018|

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Compulsory CMP to Come into Force Before Lettings Fee Ban

By |Published On: 4th April 2018|

This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.

The Government has announced that compulsory CMP (Client Money Protection) for letting agents will come into force before the lettings fee ban.

However, the Government has officially recognised that the upcoming ban on letting agents charging fees to tenants could cause some agencies to close down.

Bringing compulsory CMP in before the lettings fee ban is to “ensure that client money is not lost” in the instance that an agent goes out of business as a result of the ban.

Agents without CMP could be fined £30,000.

In an announcement early on Easter Sunday, the Government said that regulations would be laid as soon as Parliamentary time allows, requiring agents to have CMP.

At the same time, other regulations will set out of the process by which CMP scheme providers will be chosen.

There were 117 responses to the Government’s consultation last year on compulsory CMP. Most (42%) were from agents, while 22% were from tenants and landlords.

CMP schemes will be approved in a similar way to redress and tenancy deposit protection schemes. However, the legislation will allow the Government to step in and create its own CMP scheme if necessary.

The Government has also made it clear that it will not require agents to belong to a membership body in order to be able to offer CMP.

Enforcement of the compulsory CMP requirement will be by county councils’ Trading Standards, but there could also be enforcement by local housing authorities.

Agents flouting the CMP requirement could face a civil penalty of up to £30,000. However, non-compliance would not be a criminal offence or lead to a banning order.

The Government’s complete response to its consultation on compulsory CMP can be accessed online here:

We will continue to keep all property professionals up to date with new and existing lettings law at Landlord News.

About the Author: Em Morley (she/they)

Em is the Content Marketing Manager for Just Landlords, with over five years of experience writing for insurance and property websites. Together with the knowledge and expertise of the Just Landlords underwriting team, Em aims to provide those in the property industry with helpful resources. When she’s not at her computer researching and writing property and insurance guides, you’ll find her exploring the British countryside, searching for geocaches.

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