Your guide to mandatory client money protection for letting agents

24 February 2020

It has been mandatory for letting agents in England to belong to a client money protection scheme 1st April 2019 in order to safeguard the funds of their landlords and tenants.

It has been mandatory for letting agents in England who hold client money to belong to a client money protection scheme since 1st April 2019, to make sure that the funds of their tenants and landlords are protected, and to stay compliant.

What is a client money protection scheme?

Client money protection schemes are a form of insurance designed to protect client money held by property professionals, such as letting agents, to ensure that their landlords and tenants are compensated in the event that an agency is unable to repay their money.

What is client money?

Client money is any money held on behalf of the landlord or tenant in advance of being due. This includes rent, holding deposits, and security deposits (before they’re placed in a deposit protection scheme), as well as money paid in advance for bills, or repairs or maintenance work.

What are the approved client money protection schemes?

There are currently six government-approved client money protection schemes - Client Money Protect, Money Shield, Propertymark, RICS, Safeagent (previously NALS), and UKALA Client Money Protection.

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What are the requirements for joining a client money protection scheme?

To join a client money protection scheme, agencies will need to hold their clients’ money in an account with a bank or building society authorised by the Financial Conduct Authority. Agencies are also expected to have strong client money handling procedures in place. 

How do agents show that they belong to an approved scheme?

Agencies will need to display the certificate confirming their membership of an approved client money protection scheme in a visible location in each of their premises and on their website.

It’s also recommended that they publish a copy of their membership certificates on third-party websites and alongside listings on portals. Agents must provide a copy of the certificate from their approved scheme to anyone who reasonably requests it, free of charge.

What are the penalties for not belonging to an approved scheme?

Since 1st April 2019, agencies can be fined up to £30,000 if they do not belong to an approved client money protection scheme. There was no transition period for this law.

However, there is a two-year grace period, ending on 1st April 2021, for agencies who have had difficulty opening a client money account. Agencies can be fined up to £5,000 if they don’t display their certificate of membership or provide it when asked.

This article is based on guidance from and is intended as a guide only. It is not exhaustive and doesn't constitute legal advice. See for more information on client money protection schemes.


Further reading