Your guide to mandatory client money protection for letting agents

27 February 2024

It has been mandatory for letting agents in England to belong to a client money protection scheme to safeguard landlord's and tenant's funds since 2019.

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

Here's everything you need to know:

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.

The scheme was put in place to ensure that a letting agent’s landlords and tenants are compensated if an agency is unable to repay their money due to going into administration for example.

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:

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Who isn't affected by client money protection schemes?

Client money protection schemes are only applicable to letting agents in England. Letting agents outside of England may have their schemes such as:

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 need to display the membership certificate from an approved client money protection scheme in a visible location on all of their premises and their website.

It’s also recommended 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 1 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.

Agencies can also 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.


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