A Kent-based letting agency has paid a £15,000 civil penalty after operating without required client money protection, highlighting ongoing enforcement of regulations designed to safeguard landlord and tenant funds.
Homelet PMS Ltd was fined by Medway Council for breaching the Client Money Protection Schemes for Property Agents Regulations 2019, which mandate that all letting agents in England handling client funds must belong to an approved Client Money Protection (CMP) scheme.
Routine inspection uncovers non-compliance
A routine inspection in January 2023 revealed that Homelet PMS Ltd was not a member of a CMP scheme, according to the council. Officers provided advice and guidance to help the business achieve compliance. The investigation was later supported by evidence from an individual who reported that the company was holding their money whilst operating without Client Money Protection in place.
After attempts to secure compliance failed, Medway Council issued a formal warning in May 2024, followed by a Notice of Intent to impose a £15,000 financial penalty in September 2024. The council said it received no response to the notice.
A Final Notice confirming the penalty was issued in November 2024. When the fine remained unpaid, the authority began civil debt recovery proceedings. The outstanding amount was eventually paid in full in March 2026 before further enforcement action was required.
Implications for the lettings sector
The case demonstrates that local authorities are actively enforcing client money protection requirements. Similar enforcement actions have been taken across the sector, with landlords facing substantial fines under various rental safety rules.
CMP schemes are designed to protect rent payments, tenancy deposits, holding deposits and funds held for property maintenance and management. The regulations form part of broader consumer protection measures in the private rental sector, which have also seen developments in areas such as rent-to-rent arrangements and dispute resolution.
Cllr Alex Paterson, portfolio holder for Community Safety, Highways and Enforcement at Medway Council, said: “These rules are in place for a reason – to protect tenants and landlords in case something goes wrong. I would like to thank the officers involved for their persistence, and hope this serves as a warning to other businesses that we will take action when they fail to meet their legal obligations.”
The case serves as a reminder that CMP membership remains a legal requirement for all letting agents handling client funds, with local authorities able to impose financial penalties of up to £30,000 for non-compliance.
