Client money for letting agents: CMP, the client account and the monthly reconciliation

Any letting or property management agent in England that holds client money, which means rent collected for landlords, deposits held under an insured scheme, or money held to pay contractors, must belong to a government-approved client money protection (CMP) scheme. The duty has applied since 1 April 2019, the fine for not joining is up to £30,000, and the fine for not displaying your certificate is up to £5,000.

Membership is the visible part. The part that keeps the money safe is the client account itself: a separate, ring-fenced account at an FCA-authorised bank, reconciled regularly to your ledger and checked by someone who did not prepare it. This guide covers both. Checked against gov.uk, legislation.gov.uk and the published rules of the approved schemes on 31 October 2026.

Who must join and what client money is

The Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019 say a property agent who holds client money "must be a member of an approved or designated client money protection scheme". Client money is money the agent receives in the course of English letting agency or property management work and holds on behalf of another person. Rent waiting to be paid to a landlord, a tenant's deposit under an insured scheme, a float held for repairs and a holding deposit are all client money.

The scheme's cover must be at least the maximum amount of client money you may hold at any one time, so tell your scheme when the portfolio grows.

The six approved schemes listed on gov.uk are Client Money Protect, Money Shield, Propertymark, RICS, Safeagent and UKALA Client Money Protection. The basics of membership, redress and published fees are in our guide to legal requirements for letting agents.

Certificate duties and penalties

Once you are a member you must obtain a certificate and:

• display it at each office in England where you deal with clients face to face, where they are likely to see it
• publish a copy on your website
• give a copy free of charge to anyone who reasonably asks
• tell every client in writing within 14 days if your membership is revoked or you move to a different scheme

The council must be satisfied beyond reasonable doubt, serves a notice of intent, allows 28 days for representations, and the agent can appeal to the First-tier Tribunal. Separately, misusing client money can be a criminal offence.

The client account

gov.uk's rule is short: clients' money must be held in an account with a bank or building society authorised by the Financial Conduct Authority. The schemes add detail, and because membership is conditional on following their rules, these are in practice the rules every agent must meet. Client Money Protect's scheme rules (second edition, valid from March 2026) require members to:

• hold all client money, such as deposits and rents, in a client money account, with the words "client account" in the account title
• keep separate client accounts solely for residential lettings client money
• use only UK banks or building societies authorised by the FCA and covered by the Financial Services Compensation Scheme, on instant access; an electronic money institution does not qualify
• hold written confirmation from the bank that it recognises the account as a client account, that the money is held as trustee, and that the bank will not combine it with other accounts or set it off against the firm's debts
• have written approval from clients to make payments from the account, usually in the terms of business
• move any money paid into the wrong account to the right one within three working days
• keep enough in the client account to pay everything owed to clients as it falls due
• repay client money without delay when there is no longer a reason to hold it
• have written client money procedures, given to clients free of charge
• reconcile client accounts together with bank and cash balances at regular intervals

Client Money Protect also requires professional indemnity insurance with a minimum limit of £100,000, and a client account health check or accountant declaration for agents holding £250,000 or more. Propertymark requires an annual accountant's report, or for firms holding under £1 million an annual return with the client ledger, a bank balance confirmation and deposit scheme confirmation prepared to the same date.

The reconciliation

A client account reconciliation is a three-way check on one date:

1. the bank balance on the client account statement
2. the cash book, meaning the record of every receipt and payment through the account
3. the client ledger, the sum of what is held for each landlord, tenant and supplier

All three must agree, and every difference must be identified and explained: an unpresented payment, a receipt not yet posted, a bank charge, or an error. Agency fees that have been earned should be transferred out before the reconciliation is finalised, so the client account holds only client money.

How often? The schemes set a floor and good practice sets a higher bar:

• Client Money Protect: at regular intervals, to demonstrate control over the accuracy and completeness of the records
• Propertymark (rule 1.23): at least once every two calendar months, and within ten weeks of the previous reconciliation
• RICS: monthly, and promptly after period end

A monthly reconciliation, completed in the first days of the following month, satisfies all three and lines up with landlord statements. Agencies with high volumes reconcile the bank daily and still produce the formal monthly reconciliation.

The second signature

The point of a reconciliation is that it is checked by someone other than the person who did the bookkeeping. Propertymark's rule 1.23.2 requires every reconciliation to be checked and signed by the principal, or a person formally appointed by them, "who shall not be the person responsible for the preparation of such reconciliation". RICS says a principal or senior independent member of staff should review and approve it, and that reconciliations must be signed and dated.

In a two-person office that means the owner signs what the property manager prepared. If one person does everything, the reporting accountant can perform the check, within ten working days under Propertymark's rules. Keep every signed reconciliation and its supporting statements and ledger listings where a scheme inspector or the accountant can find them.

What the accountant will ask for

Scheme renewals and accountant declarations typically require two reconciliation dates with bank statements, cash book and ledger listings for each, evidence of deposits registered with your deposit scheme, and your written procedures. Client Money Protect's accountant declaration asks for two client account reconciliation dates, one within six months of the membership start or renewal date. Having twelve signed monthly reconciliations on file turns that into a filing exercise rather than a reconstruction.

A monthly routine

1. Transfer earned fees out of the client account before month end.
2. On the first working day, download the client account statement to the last day of the month.
3. Post every receipt and payment; chase unmatched bank lines.
4. Run the client ledger total and compare it with the bank balance and cash book.
5. List and explain every difference; correct errors in the ledger, never by adjusting the bank figure.
6. Have a second owner or manager check and sign the reconciliation, dated.
7. File the reconciliation, statement and listings together. See our compliance checklist for the other monthly tasks.

How Letfold helps

Letfold's client money report shows what should be in the client account at any date: rent held for landlords, tenant money, deposits and money owed to suppliers, with any agency shortfall flagged. The monthly reconciliation compares that figure with the bank balance you enter, stores the breakdown, and requires a second owner or manager to sign it; the person who prepared it cannot sign it off. Bank statement CSVs are matched to tenancies and move-in requests in the same system, and landlord statements are produced from the same records. See rent, statements and client money and pricing.

Frequently asked questions

Do all letting agents need client money protection?

Letting and property management agents in England who hold client money must belong to an approved scheme. A let-only agent whose fee is paid directly by the landlord, with rent going straight to the landlord, holds no client money; most managing agents do.

What is client money for a letting agent?

Money received in the course of letting agency or property management work in England and held on behalf of someone else: rent awaiting payment to landlords, deposits under an insured scheme, holding deposits, and money held to pay contractors.

How often should a letting agent reconcile the client account?

Monthly is the standard that satisfies every approved scheme. Propertymark's rules allow up to two calendar months between reconciliations and RICS requires monthly; Client Money Protect requires regular intervals.

Who should sign off a client account reconciliation?

Someone other than the person who prepared it: a principal or senior manager, or the reporting accountant within ten working days under Propertymark's rules. The signature should be dated and kept with the reconciliation.

What is the fine for not having client money protection?

Up to £30,000 for holding client money without scheme membership, and up to £5,000 for not displaying or providing the certificate or not telling clients about a change of scheme.

Sources

Checked on 31 October 2026:

• Protecting clients' money if you're a property agent (gov.uk)
• Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019 (legislation.gov.uk)
• Client Money Protect scheme rules, second edition, valid from March 2026 (Client Money Protect)
• Propertymark Conduct and Membership Rules, rule 1.23, as quoted in a published disciplinary decision and Client account reporting (Propertymark)
• RICS: client money (RICS)

This article is general information for England, not legal advice.