On the 12th of March 2019, the government released official confirmation that the 1st of April sees the final date by which landlords and letting agents must comply with new legislation on the protection of any client money they hold.
The new legislation – which was laid before Parliament last year – now bolsters the existing rules on Tenancy Deposit Protection by extending the safeguards to any funds held by landlords or their letting agents on behalf of tenants.
The new legislation requires that landlords and letting agents must:
- hold all tenant money in a specific client money account at a bank or building society authorised by the Financial Conduct Authority (FCA) – or an approved Client Money Protection scheme provider (about which we reported on the 5th of March 2019);
- arrange and continue to hold suitable professional indemnity insurance;
- maintain appropriate client money protection management procedures;
- hold – and prominently display in any public-facing office and on any website – a certificate that confirms their membership of an approved CMP scheme; and
- furnish a copy of that certificate free of charge to anyone who has reasonable cause to ask for one.
Landlords and letting agents are being given a period of grace after the 1st of April – but only until the 1st of April next year – to arrange their membership of an approved CMP scheme.