New scheme to make CMP available to all letting agents for first time
For the first time, all letting agents will be able to get Client Money Protection, whether or not they are members of a recognised trade body or association.
It means that from now on, landlords and tenants will not necessarily have to look for a member of, for example, ARLA, NALS or RICS, to ensure that their money will be safe.
Yesterday, a new organisation called CM Protect launched. While it has the status of an organisation, this is purely to be able to offer the insurance at all – individual agents cannot take out their own insurance against the possibility that they may go bankrupt, misuse or run off with clients’ money.
It has been formed by the management team behind insurers Total Landlord Insurance and tenancy deposit scheme Mydeposits.
The sole purpose is to provide Client Money Protection insurance to letting agents who are not members of a recognised trade body or association yet wish to act responsibly.
Until now, belonging to one of these bodies was the only way for clients of letting agents to benefit from such protection.
CMP insurance protects the money of landlords and tenants against theft or misappropriation by the owners of a letting agent whilst it is in their custody or control. This could include tenants’ deposits and landlords’ rental payments, or funds held for repairs and maintenance to a property.
Reports of lettings agents starting up on the back of a poorly performing sales market and then folding, taking with them all their clients’ money, has had a damaging impact on responsible independent and smaller letting agents.
Eddie Hooker, chief executive of CM Protect Ltd, said: “There are many reasons why a letting agent does not feel it should be a member of an industry trade body, such as educational obligations, but they should not be prevented from accessing this valuable protection which demonstrates an upholding of responsibility to clients and provides the reassurance of a well-run professional agency.”
Ian Langley, pictured, director of operations for CM Protect, said: “We do not wish to compete with the industry trade bodies as we recognise the importance and value of these in raising standards and would always encourage larger agents in particular to uphold this.
“However, we feel that there is a void in the market and we want to encourage those smaller agents, who are currently not protected by CMP, to act responsibly without having to take on the commitment of a trade body.”
CMP insurance has to be provided by a body or organisation that is independent from the letting agent.
For this reason, CM Protect is establishing itself as a ‘membership’ body, but without ‘codes of conduct’ or other requirements. The benefit of CMP is only available to letting agents whilst they remain a member.
Article courtesy of Letting Agent Today