![\"\"](\"http:\/\/blog.castle-estates.co.uk\/staffordshire\/wp-content\/uploads\/sites\/4\/2012\/06\/CMP.jpg\" "\\"CMP\\"")
<\/a><\/p>\nClient Money Protection explained and TPO client survey. <\/strong><\/p>\n Letting Agents can go bust (I know!) But when they do, it can be amid claims of owing landlords and tenants thousands of pounds, so here\u2019s a quick guide to what Landlords and Tenants should look for to safeguard their money.<\/p>\n Letting agents are not regulated, which means anyone can open and trade as a letting agent without any qualifications or licence. Like any other business, if a letting agent stops trading, landlords and tenants become creditors and risk losing any rents or deposits held by the agent.<\/p>\n To stop this, several industry groups run \u2018client money protection\u2019 schemes \u2013 sometimes called \u2018CMP\u2019. Belonging to a client money protection scheme does not mean a landlord will receive compensation if something goes wrong \u2013 the schemes have terms and conditions, like time limits for claims and caps on pay outs, so check the finer points do not exclude your rental business.<\/p>\n The main CMP schemes are:<\/p>\n \u25cf National Approved Letting Scheme (NALS<\/a>)<\/strong><\/p>\n NALS will pay up to \u00a325,000 for any one claim, with a cap for landlords of three months\u2019 rent. The total top pay out for a single claim is \u00a3300,000, while the scheme will only pay \u00a33 million in any one year.<\/p>\n \u25cf Association of Residential Letting Agents (ARLA<\/a>)<\/strong><\/p>\n ARLA will compensate a landlord up to a limit of \u00a325,000. Landlord claims are limited to three months\u2019 rent. The total payable for a member company is \u00a3500,000. In any one year, the scheme has a limit of \u00a33 million.<\/p>\n \u25cf Royal Institution of Chartered Surveyors (RICS<\/a>)<\/strong><\/p>\n RICS will pay a maximum of \u00a350 000 per letting agents, subject to an overall limit for the scheme of \u00a35.3 million for any one year.<\/p>\n \u25cf SafeAgent<\/strong><\/p>\n SafeAgent is not a CMP scheme, but an umbrella group for letting agents who are members of a CMP scheme. The aim is to promote money protection by displaying a single, recognisable logo that shows any money with a letting agent is safeguarded. Letting agents belonging to client money protection schemes should display a logo of one or more of the schemes listed above on their web sites and letterheads.<\/p>\n Even if you see the logo, still check the CMP scheme web site to make sure membership is valid. Some unscrupulous letting Agents say they are members and use the logo when client money is not protected. Don\u2019t forget that just because the agent was part of a CMP scheme one year does not mean membership is still in force years later \u2013 check every year.<\/p>\n TPO canvasses members over CMP<\/strong><\/p>\n The Property Ombudsman Scheme (TPO) is also aware of the importance of CMP as it is now canvassing member firms <\/a>over the provision of insurance.<\/p>\n \u201cWhilst membership of TPO requires all residential sales and letting agents to abide by the TPO Codes of Practice, have Professional Indemnity Insurance, and agents holding clients\u2019 money to deposit this money in a separate clients account, it does not currently require residential letting agents to hold CMP,\u201d explains Bill McClintock, chairman of the TPO operating company who is circulating a consultation document to members. \u201cGiven that the Code of Practice is generally accepted as the primary standards document in the industry, the omission of such an important aspect needs to be addressed. \u201cThis is something the board and the Ombudsman, Christopher Hamer, have been considering for some time and recent incidences of both landlords and tenants suffering financial loss means action on CMP is now imperative. Private residential lettings reportedly make up 17 per cent of the UK housing stock.\u201d<\/p>\n The consultation paper sets out various options and points out that member\u2019s of ARLA, NALS, and RICS are required to have CMP. Some letting and management companies acting as subcontractors also provide CMP on all landlord and tenant funds.<\/p>\n McClintock is asking TPO members which of these options, or an alternative fallback position that all TPO member firms without CMP must disclose in writing and actively flag its absence at the point of instruction or sale of services, they would prefer to see enforced through the TPO Lettings Code of Practice.<\/p>\n \u00a0\u201cTPO and its Codes of Practice are part of a consumer protection regime with the firm objective of raising standards in the industry,\u201d adds McClintock. \u201cWhilst TPO cannot force agents to sign up to the Code, firms should see the Codes as enhancing the reputation of the industry and for those that are already members of TPO the addition of a clause requiring CMP will enable them to demonstrate to landlords and tenants that their money is protected.<\/p>\n \u201cTPO is a not-for-profit company and will not itself offer CMP to member firms as a new revenue stream. It is not appropriate for TPO to offer such services but I believe it is appropriate for member firms to have such cover. However, members now have the opportunity to express what they think should be the minimum required standard.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" By Mike Edwards Client Money Protection explained and TPO client survey. Letting Agents can go bust (I know!) But when they do, it can be amid claims of owing landlords and tenants thousands of pounds, so here\u2019s a quick guide to what Landlords and Tenants should look for to safeguard their money. Letting agents are …<\/span> Read More →<\/span><\/a><\/span><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[55],"tags":[59,24,67,37,75],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/blog.castle-estates.co.uk\/staffordshire\/wp-json\/wp\/v2\/posts\/1359"}],"collection":[{"href":"https:\/\/blog.castle-estates.co.uk\/staffordshire\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.castle-estates.co.uk\/staffordshire\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.castle-estates.co.uk\/staffordshire\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.castle-estates.co.uk\/staffordshire\/wp-json\/wp\/v2\/comments?post=1359"}],"version-history":[{"count":1,"href":"https:\/\/blog.castle-estates.co.uk\/staffordshire\/wp-json\/wp\/v2\/posts\/1359\/revisions"}],"predecessor-version":[{"id":1638,"href":"https:\/\/blog.castle-estates.co.uk\/staffordshire\/wp-json\/wp\/v2\/posts\/1359\/revisions\/1638"}],"wp:attachment":[{"href":"https:\/\/blog.castle-estates.co.uk\/staffordshire\/wp-json\/wp\/v2\/media?parent=1359"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.castle-estates.co.uk\/staffordshire\/wp-json\/wp\/v2\/categories?post=1359"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.castle-estates.co.uk\/staffordshire\/wp-json\/wp\/v2\/tags?post=1359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}