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Mandatory Client Money Regulation for Property Agents Confirmed

The Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019 (SI 2019 / 386) have been enacted and come into force on 1 April 2019.

The Explanatory Note highlights that the legislation:

  • Requires property agents that hold money on behalf of a client to belong to an approved or designated client money protection scheme in order to afford protection to that client against the loss, theft, misappropriation, etc. of their funds, and that membership must be one that protects the maximum amount of client money that the agent may hold;
  • Requires a property agent to provide evidence of or information about its membership of a scheme; and
  • Makes provision for the enforcement of the requirements by local authorities in England including the imposition of a financial penalty of up to £30,000.

At present, the following schemes have been approved by the Government:

We will be updating our Property Agent's Client Money Manual shortly and will include as much guidance on the impact of mandatory regulation as possible.