No hiding for agencies with no CMP

A significant case involving an agent receiving a substantial fine for failing to adhere to CMP (Client Money Protection) regulations has brought this legislation into sharp focus once again.

As of 1st April 2019, the law mandates that all agencies must be part of a government-approved CMP scheme if they handle any client funds. Failure to comply with this requirement can result in penalties of up to £30,000.

Landmark fine for non-compliance

In a landmark tribunal involving Carter & Reeves Ltd, it was found that the company was in violation of the regulations because their compliance was dependent on the CMP membership of a former director, Mr. Draper. The judge ruled that once Mr. Draper ceased to be a director and applied for CMP cover, the company was no longer eligible for the scheme.

Judge Marks emphasised that agents running a business should be fully aware of their legal obligations and the status of each of their directors. Consequently, the company received a fine of £24,000 for their non-compliance.


Since the legislative change in England, there have been several regional Trading Standards crackdowns, including in London and the West Midlands. These crackdowns have led to Trading Standards authorities issuing penalty notices exceeding £3 million in London alone. The West Midlands crackdown received support from The National Trading Standards Estate and Letting Agency Team (NTSELAT), which offers specialised advice, guidance, and support to local authorities.


CMP requirements mandate that any agent holding client money, such as rent or funds for repairs, must have CMP cover. This legislation protects both landlords and tenants in the event of an agency going out of business or any misappropriation of funds.

Agents accepted into a scheme must ensure that client money is kept in a separate bank account from business funds, and they must display the appropriate certificate on their website and in their branch. However, the case of Carter & Reeves serves as a reminder that once a director resigns, the CMP cover associated with that individual (Principal, Partner, or Director) will also end.

Choosing a CMP scheme 

Selecting the right CMP scheme is crucial, considering there are six government-endorsed options available. Propertymark's CMP is one of these schemes, and agents must meet strict requirements to be accepted, including:

  • Providing an Accountant's Report or financial 'Health Check'

  • Evidence of the correct level of Professional Indemnity Insurance

  • Membership in an Independent Redress scheme (of which there are two government-approved options)

  • Successfully passing a Fit and Proper Person Test

Credible property agents 

Agents can access CMP cover and apply for full Propertymark membership after submitting additional documentation including:

  • Information Commissioner's Office (ICO) registration for data protection purposes

  • A completed Company Declaration Form submitted annually, along with the agent's Terms of Business and tenancy agreement

  • Confirmation of registration with HMRC under Money Laundering Regulations

  • A commitment from PPDs to follow The Property Ombudsman Codes of Practice

Members of Propertymark gain access to best-in-class CPD qualifications, free legal advice, and professional templates and fact sheets simplifying complex legislation. Regional events also provide a platform for representatives to share updates and for agents to network and collaborate.