A letting agent that holds client money must belong to a Client Money Protection scheme and keep a client account.
Regulation 3 of SI 2019/386: a property agent who holds client money must belong to an approved or designated client money protection scheme. It applies in England only.
The client account itself comes from the scheme approval conditions in SI 2018/751 reg 5(2): client money in an account with an FCA-authorised bank or building society, written procedures published on your website, and professional indemnity insurance sized to the business and the money held.
MHCLG’s guidance treats all of these as client money. Money held in an authorised tenancy deposit scheme is excluded.
An agency that holds no client money needs no CMP scheme. MHCLG’s guidance accepts this evidence:
A float held for repairs, or a holding deposit taken while referencing runs, is client money however the rest of the business is arranged.
Prohibited before an assured tenancy is entered into, from 1 May 2026. Agents may not invite, encourage, accept an offer of or accept it.
Prohibited from the same date. Advertise a specific rent and do not invite, encourage or accept an offer above it.
Against tenants with children or on benefits, in adverts, information, viewings and decisions to let.
Once a year, through the revised section 13 procedure with at least two months’ notice.
Client account bookkeeping and monthly reconciliation to the standard your scheme expects. Revenue recognised as commission only, never gross rent, with management fees spread over the management period and tenant-find fees at the point the tenancy is secured.
The VAT treatment of referencing, inventories, portal costs and any insurance or mortgage introductions. And the annual accounts, corporation tax, payroll and management figures.
Any of the six approved ones — the choice is a commercial one. They are Client Money Protect, Money Shield, Propertymark, RICS, Safeagent and UKALA Client Money Protection. What differs between them is cost, the compensation caps the Secretary of State has approved under reg 5(1A), what else comes with membership, and the accounting conditions they impose. Propertymark, for instance, requires an annual Accountant's Report where a member holds more than £1 million in client accounts excluding registered insured deposits, or operates as a Client Accounting Service Provider — and requires the accountant to be a member of an FRC Recognised Supervisory Body with a practising certificate and no connection to the company. Read the conditions before choosing on price.
Four of them, and each is a separate breach at up to £5,000. Under reg 4 you must display the certificate at each premises in England where you deal with people face to face, at a place where it is likely to be seen; publish a copy on your website if you have one; produce a copy free of charge to any person who may reasonably require it, which includes enforcement officers; and notify every client in writing within 14 days if your membership is revoked or you change scheme. MHCLG's guidance is explicit that the notification duty applies even if no certificate was ever issued. Failing to display and failing to produce on request is two penalties, not one. Multiple offices of a single legal entity count as one breach.
A fee list, and a statement naming both your schemes. Consumer Rights Act 2015 s.83 requires a letting agent to display a list of fees at each face-to-face premises, on its website, and in England on third-party sites. Each fee needs a description sufficient to enable a person to understand the service or cost, must state whether it is per dwelling or per tenant, and must give the amount inclusive of any applicable tax. Subsections (6) and (7), added by the Tenant Fees Act with effect from 1 June 2019, require you to state that you are a member of a client money protection scheme and to give the name of the scheme, and to do the same for your redress scheme. The penalty is up to £5,000.
It depends on the rent, and the test changed on 30 June 2026. MLR 2017 reg 13(4)(b)(ii), as amended by SI 2026/621, now sets the threshold at £10,000 or more per month. It was €10,000. Both conditions must be met: a term of a month or more, and rent of £10,000 or more per month during at least part of the term. It applies to land generally, so commercial lettings count. If you also carry out any estate agency work — even occasional sales instructions — you are in scope through the estate agency limb regardless of rent levels, and registration there is required before you trade at all. HMRC's letting agency guidance page still says euros and is three years out of date; work from the Regulation.
Wider than rent, and MHCLG lists seven categories. Rent held after your fees are deducted. Utilities, council tax or communication services held in advance. One-off repair payments. Maintenance floats. Miscellaneous advance payments for professional work. Security deposits that are not yet protected — the window before they reach an authorised tenancy deposit scheme. And holding deposits. Money held in an authorised deposit scheme is excluded by reg 2, but the unprotected window before it gets there is not. Maintenance floats are the other one agencies miss, because they feel like working capital and are not.
Not for your own membership. The Renters' Rights Act sections 64 to 74, which create the landlord redress scheme, are not commenced, and the roadmap gives 2028 as an expected year, with no fixed date. More usefully, the government's guide confirms that agents are not required to join it — you remain in your existing agent redress scheme, The Property Ombudsman or The Property Redress Scheme. What will affect you is that landlords who use managing agents remain responsible for their own behaviour, so expect landlord clients to ask harder questions about what you are doing on their behalf once the scheme exists.
We start by establishing which regime you are in.