Property industry insurance and redress giant Hamilton Fraser has become the first company in the UK to gain official approval to operate a client money protection (CMP) scheme.
Hamilton Fraser, which has been operating the scheme since 2014, is now ready for April 1st when it becomes mandatory for all letting agents and property managers to sign up to CMP or face fines and sanctions for non-compliance.
Called Client Money Protect, Hamilton Fraser says it does not feature claim limits or caps so that all of an agent’s customers are covered should ‘the worse happen’.
This refers to recent cases when owners or employees of letting agencies have either stolen tenants’ deposits and rental payments to fund luxury lifestyles, failed to pass them on to landlords, or omitted to ring-fence clients funds and used them to prop up failing businesses.
Client Money Protect will also cover missing deposits that have not been placed in an approved tenancy deposit scheme, and also covers agents should their bank fail, although only up to a certain level.
The scheme is designed to appeal to the UK’s small-to-medium size letting agencies who hold less than £5 million of client money.
“We have worked hard to create a scheme that fully encapsulates the principle of what the government is trying to do by introducing mandatory client money protection,” says Eddie Hooker, CEO of Hamilton Fraser (left).
“We want to be the gold standard of client money protection schemes.”
Paul Shamplina of Landlord Action, which was bought by Hamilton Fraser in 2017, adds: “Having dealt with too many cases where landlords and tenants have fallen victim to rogue letting agents who have misappropriated their money, I have long championed this move for our industry.”