Client money protection for property agents

Since 1 April 2019, every letting agent and property manager in England who holds client money must be a member of a government-approved Client Money Protection (CMP) scheme. The requirement is set out in the Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018. Reviewed March 2026.

What the rule is

Client Money Protection is a form of insurance that protects landlords and tenants if a letting agent misappropriates, misuses, or becomes insolvent while holding their funds. The requirement is mandatory for any agent who holds client money in the course of their business. Membership must be with one of the schemes currently approved by the Secretary of State under the 2018 Regulations.

The approved CMP schemes (as of March 2026) include:

• Propertymark (formerly ARLA Propertymark CMP)
• RICS (Royal Institution of Chartered Surveyors)
• NALS (National Approved Letting Scheme)
• SAFEAGENT
• UKALA (UK Association of Letting Agents)
• Tenancy Deposit Scheme (TDS) CMP
• Money Shield

Agents must check the current government list, as approvals are reviewed periodically.

When it applies

The requirement applies to any person or business that:

• Carries out letting agency work or property management work in England
• Holds “client money” at any point in the course of that work

“Client money” is broadly defined. It includes:

• Rent collected from tenants on behalf of landlords
• Tenancy deposits held before registration with a tenancy deposit scheme
• Landlord funds held for repairs, maintenance, or float accounts
• Holding deposits collected from prospective tenants
• Any other money belonging to a client (landlord or tenant) held by the agent

Agents who never touch money — for example, a referencing-only service that never handles rent or deposits — would not be caught, but this is an uncommon model in full letting agency.

What landlords/agents must do

Agents must:

1. Join a government-approved CMP scheme and maintain active membership
2. Ensure client money is held in a designated client account, separate from the agent’s own business funds
3. Display their CMP certificate on their website and in any office open to the public (see the separate display guide)
4. Provide a copy of the CMP certificate to any person who asks
5. Notify the scheme and the relevant local authority within 14 days of any change that may affect membership eligibility

CMP membership must be renewed annually. The certificate issued by the scheme must be current.

What evidence to keep

Agents should maintain:

• Current CMP scheme membership certificate (and historical certificates for prior years)
• Proof of how and where the certificate is displayed (screenshots of website, photos of office display)
• Client account bank statements showing the segregation of client funds
• Records of any claims made under the CMP policy and their outcomes

A compliance calendar should include the annual CMP renewal date to ensure membership never lapses.

Common mistakes

Confusing CMP with tenancy deposit protection. These are two entirely separate obligations. Deposit protection protects a specific tenant deposit; CMP protects client money more broadly and covers agent insolvency or misappropriation.

Not segregating client money. CMP schemes require client money to be held in a ring-fenced client account. Mixing client and business funds is both a breach of the scheme rules and potentially a criminal offence.

Assuming trade body membership automatically satisfies CMP. Some trade body memberships include CMP as part of the package; others do not. Agents must confirm their specific membership covers the CMP requirement.

Failing to display the certificate. Display is a separate legal obligation (see the client money protection regulations). Failure to display is a civil offence with a fine of up to £500 per breach.

Not notifying the scheme of changes. If an agent takes on additional offices, changes its company structure, or increases the volume of client money held, the scheme must be notified as the level of cover may need to increase.

FAQ

What is the penalty for not having CMP? A local authority can impose a fine of up to £30,000 on an agent who holds client money without being a member of an approved CMP scheme.

Do property managers need CMP as well as letting agents? Yes. The requirement applies to property management work as well as letting agency work. A managing agent who collects service charges or holds maintenance floats on behalf of residential clients must comply.

Does CMP cover all client money losses? Coverage limits vary by scheme. Agents should check the maximum claim amount and per-claim limits under their specific scheme. CMP does not cover losses resulting from lawful deductions or legitimate business disputes.

What if a landlord’s funds are lost due to agent fraud? The landlord (or tenant) would make a claim directly to the CMP scheme. The scheme will assess the claim and, if valid, compensate the client up to the scheme’s limits. The scheme then typically pursues recovery against the agent.

Do online/hybrid letting agents need CMP? Yes, if they hold client money at any point. The requirement applies regardless of the agent’s business model.