Client Money Protection cover now available to all Agents

by Property 118

10:27 AM, 17th July 2013
About 5 years ago

Client Money Protection cover now available to all Agents

Make Text Bigger
Client Money Protection cover now available to all Agents

The Property Ombudsman (TPO) scheme has pushed on behalf of the Lettings industry to make Client Money Protection cover (CMP) available to all UK lettings agents.

Up until this month, CMP cover was only available through a number of trade bodies. The introduction of two new CMP providers this month will enable letting agents that are not registered with a trade body to sign up for cover.

Gerry Fitzjohn, Chief Operating Officer of TPO said:

‘We need an even playing field for lettings. All agents are required to hold client money in a separate Clients Account but there is no current requirement to have those funds insured against unlawful use or fraud, which is why CMP is crucial for landlords and tenants.

‘CMP is not a duplication of any deposit scheme or professional indemnity cover. It goes beyond that and provides landlord with the peace of mind they need to know that the rent collected by an agent is protected.

‘This isn’t ‘news’ to the thousands of experienced agents that have had comprehensive CMP cover with a trade body for many years and we fully support the ongoing efforts of trade bodies such as ARLA, NALS, RICS and UKALA to improve industry best practice. The new CMP products launched this month by PSR Insurance brokers and Hamilton Fraser Insurance Brokers mean CMP cover is now available to the whole of the market, which can only be a good thing.’

It is estimated that some £23 billion is paid annually in rent, of which £6 – £10 billion is collected by agents on behalf of landlords1.

Press reports over recent months have highlighted a number of cases where landlords or tenant have not been able to recover funds due to them, which were held by agents.

TPO has surveyed 8,000 lettings branches2 to assess the viewpoints of member agents registered with the TPO scheme. The results revealed an overwhelming number of agents backed CMP, with 80% already protected.

Mr Fitzjohn added:

‘We passionately believe that CMP is great for consumer protection and will ultimately result in a reduction in the number of complaints against lettings agents. We know from surveying our own agents that the vast majority already have cover. For those that don’t, they now have an opportunity to distinguish themselves from any rogue operators by showing landlords and tenants that they have the appropriate cover in place.

‘My personal viewpoint would be to question why a letting agent would not support CMP. In the absence of any regulation for the UK private rental market, agents themselves need to take proactive steps to show landlords and tenants that they have taken out the necessary cover to protect rental income.

‘We now need the industry to unite to raise awareness of this issue so consumers understand the value of CMP and we will be writing to each of our TPO registered offices this month to publicise our support.’



Comments

Mark Alexander

11:19 AM, 17th July 2013
About 5 years ago

It will be interesting to hear what SAFEagent have to say about this. will they accept letting agents which purchase CMP, PI and subscribe to a redress scheme regardless of whether they are also a member of a professional body I wonder?

This also begs the question, what are the incentives for Letting Agents to remain members of organisations such as NALS and UKALA?

12:59 PM, 17th July 2013
About 5 years ago

So by definition ANY LA that does NOT have CMP now is a WRONGUN.
Just need to get the message out to tenants and LL and put out of business any LA that refuses to take out CMP!!

Emma Reid

15:56 PM, 17th July 2013
About 5 years ago

I think it`s a great step forward. As a member of TPO only, I have always felt like NAEA, ARLA, NALS etc tend to snub TPO agents & are always throwing the CMP thing in our faces.
We will definitely be first in the queue to sign up for this insurance. We have absolutely nothing to hide & our Landlords are welcome to look at our client accounts anytime they like. We run a good, honest business. Hence the reason our Landlords stick with us.
I did my training, back in the day, under the guidance of a Fellow of NAEA. Some years later, he turned into `wrongun` & disappeared with multiple thousands of pounds of clients rent money & deposit money. It isn`t always the unregulated agents that are the unscrupulous ones, yet it only seems to be the unregulated ones that receive a battering for it!!

Steve Elliot

15:43 PM, 20th July 2013
About 5 years ago

Reply to the comment left by "Emma Reid" at "17/07/2013 - 15:56":
Hi Emma,
Please let me know how to become a member of TPO. totally support your view on these "professional bodies" .
Thanks.

Mark Alexander

19:11 PM, 20th July 2013
About 5 years ago

Reply to the comment left by "Steve Elliot" at "20/07/2013 - 15:43":

Just Google The Property Ombudsman, it's quite easy to join. Make sure you get your professional indemnity insurance first though as they will not even consider your application without it

Emma Reid

19:43 PM, 21st July 2013
About 5 years ago

Hi Steve,

Follow the advice given by Mark. That`s all we did a few years ago. You also need to pay annual membership fees - it varies depending on whether you want to join for both sales & lettings or just 1 of them. The prices should be on their site (if not, their tel number will be there to phone them & enquire).

Thanks

Paul Parker

19:40 PM, 31st October 2013
About 5 years ago

Agree with the above comments regarding the TPO putting forward something other than what the 'cartels' have been protecting but think the £500+ premium by Hamilton Fraser is taking the you know what.

Mark Alexander

20:36 PM, 31st October 2013
About 5 years ago

£500 a year for client money protection sounds very reasonable to me. Solicitors pay significantly more than that.

Vanessa Warwick

22:38 PM, 31st October 2013
About 5 years ago

Thought it worth mentioning .... It will become mandatory for all lettings agents to be a member of an Ombudsman Scheme next year!

I was at the NALS annual conference today and interviewed both of the Ombudsmen (TPO and Ombudsman Services (Property), and they talked about compliance and how membership of an Ombudsman scheme helps build consumer confidence.

Those agents who are already registered will find the arrival of regulation an opportunity to say that they had already voluntarily joined the scheme, a good way to differentiate themselves from those that waited to be forced!

David Elston

17:48 PM, 21st August 2017
About A year ago

Does anyone know what the CMP providers are, that are not one of the big professional bodies?

This article like many others talks about them but never references them by name... it makes it really hard to find them.

1 2

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

44% of landlords fear Right to Rent

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More