Since April 2019, all letting agents and property managers in England who hold client money have been legally required to belong to a government-approved Client Money Protection (CMP) scheme. This requirement was introduced under the Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019 (SI 2019/386), which came into force on 1 April 2019.
These Regulations apply in England only - they reach "English letting agency work". Client money is protected across Great Britain, but by three different mechanisms, so do not assume the English scheme rules describe your duty.
- Wales: there is no Welsh equivalent of these Regulations. Client money protection is imposed as a condition of a Rent Smart Wales licence under s.22 of the Housing (Wales) Act 2014.
- Scotland: a different mechanism again - the Letting Agent Code of Practice (Scotland) Regulations 2016 require client money protection insurance, rather than membership of an approved scheme.
- Northern Ireland: we have not identified an equivalent statutory requirement - check the current position before relying on that.
What Is Client Money?
If you only do sales work, these Regulations are not your duty. They reach letting and property management work. A sales agent's obligations sit elsewhere - the Estate Agents Act 1979, membership of an approved redress scheme, and the Money Laundering Regulations 2017 - and those apply across the UK.
Client money is any money you hold or receive on behalf of another person in connection with letting or property management work. This typically includes:
- Tenancy deposits (before they are placed in a deposit protection scheme)
- Rent collected on behalf of a landlord
- Funds held for property maintenance or repairs
- Any other money you hold in trust for a client
Why CMP Is Required
CMP protects landlords and tenants if an agent misappropriates their money or if the agency goes into administration. Without CMP, clients have no financial safety net if something goes wrong. The government's overview for agents is on GOV.UK: Protecting clients' money if you're a property agent.
Who Must Have CMP?
The requirement applies to property agents in England who hold money on behalf of a client in the course of letting or property management work (see GOV.UK: Mandatory client money protection). If you do not hold client money at any point - for example, if tenants pay rent directly to the landlord and deposits go straight to a protection scheme - the position may differ, but you should take advice to confirm whether the requirement applies to you.
Sales agents who hold deposits (such as reservation fees or exchange deposits) should consider separately whether protection is needed; the 2019 Regulations are aimed at letting and property management work. Check the current GOV.UK guidance for your situation.
Approved CMP Schemes
The government lists the approved schemes on GOV.UK. At the time of writing these included Client Money Protect, Money Shield, Propertymark, RICS, Safeagent (previously NALS) and UKALA Client Money Protection. The approved list can change, so always check the current list on GOV.UK before choosing or relying on a scheme.
Each scheme sets its own membership fees and requirements. Compare them based on cost, claims process, and any additional benefits.
Your Obligations
- Join an approved scheme before you handle any client money, and make sure your cover is for the maximum amount of client money you may hold
- Display your CMP certificate prominently in any office where you deal with the public and on your website (a transparency requirement under the Regulations - see GOV.UK)
- Provide a copy of the certificate, free of charge, to any person who reasonably requests it (including enforcement authorities)
- Hold client money in a separate designated client account - never mix it with your business funds
- Keep accurate records of all client money received and paid out
- Renew your membership in line with your scheme's terms
Penalties for Non-Compliance
Enforcement sits with local authority Trading Standards. Under the Regulations, a breach of the core requirement to belong to an approved scheme can attract a financial penalty of up to £30,000, and a breach of the transparency requirements (such as failing to display or produce your certificate) can attract a penalty of up to £5,000 (GOV.UK enforcement guidance for local authorities). Penalty levels and enforcement can change - check the current GOV.UK guidance for the position that applies to you.
Best Practice
- Reconcile your client account regularly (at least monthly)
- Ensure all staff who handle client money understand their responsibilities
- Have a clear written procedure for handling, recording, and disbursing client money
- Consider professional indemnity insurance alongside CMP for additional protection
- Remember that letting agents are also subject to the wider lettings regime, including the ban on most letting fees under the Tenant Fees Act 2019
CMP is a legal requirement for letting agents and property managers in England who hold client money. If you are unsure whether you need CMP, seek legal advice. Details of approved schemes and the current rules are available on the GOV.UK website.
Last reviewed: 14 June 2026. This is general guidance, not legal advice - always check the current gov.uk guidance.