Updated February 2024

Anyone can start up a letting agents. They can take rent and deposits without regulation or checks that they are competent or qualified. Equally, there is no legal requirement for lettings agents to be licensed or part of a Client Money Protection scheme (CMP), yet this is the only way tenants and landlords can really be sure their money is secure.

The importance of Client Money Protection

• CMP is operated by professional bodies such as the Association of Residential Lettings Agents (ARLA Propertymark) and the Royal Institution of Chartered Surveyors (RICS).
• Agents who are members of ARLA Propertymark, or belong to RICS, must also maintain and operate separate designated client accounts so that money is held completely separate and ring-fenced from the operating funds of the firm.

The professional bodies are completely independent and agent members must follow the code of practice and rules of conduct laid down by their professional body, be it ARLA Propertymark or RICS. Thus, being a member guarantees that an agent meets certain standards.

Minimum standards required for CMP

• A member must have professional indemnity insurance, which protects the client from financial losses incurred through negligent or misleading advice or if the agent goes into liquidation.
• They must have defined accounting procedures relating to clients' money.
• There must be a customer complaints procedure so that in the event something goes wrong, there is a complaint procedure to follow and redress available.
• The agent must have membership of an ombudsman scheme.

The professional bodies also require members to keep up to date with the latest legislative changes and regulations affecting lettings, as well as completing Continuing Professional Development training throughout the year.

Non-members of the professional bodies, on the other hand, might provide incorrect or misleading advice resulting in the consumer suffering a financial loss.

So clearly, if you want to keep your money safe, you should use a letting agent who is a member of one of the above professional bodies.

Further information

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