Latest Homes speaks to Prominence Property

In safe hands

Latest Homes speaks to Prominence Property, a letting agency who takes your money seriously

Ever heard of a letting agency having an annual financial health check? It’s part of CM Protect’s rigorous new application process for providing an agency with client money protection insurance. Local independent letting agent, Prominence Property, recently became the first letting agency in the country to have its application to join CM Protect approved.

Agency owner Mehdi Jahani was keen to join the new client money protection insurance (CMPI) scheme, provided by CM Protect, when it launched on 1 July this year. He saw it as an opportunity to reassure his clients and tenants that he’s managing their money efficiently.

Client money protection insurance (CMPI) is a common service in the lettings and other professional industries. It’s something savvy landlords and tenants are advised to ask about before they deal with a letting agency. If an agency misappropriates its clients’ money, the clients will be reimbursed through the CMPI.

Agencies are not legally required to have CMPI, and until the launch of CM Protect, the only way for a letting agency to get this type of insurance was to be a member of a registered trade organisation such as the Association of Residential Lettings Agents or the National Association of Estate Agents.

“Clients don’t want to think about having to claim money back – they want a guarantee that I’m managing it well to begin with!”

As Mehdi explains: “I feel it’s important for my clients and my tenants to know that someone’s actually checking that I’m managing their money appropriately. Ideally they don’t want to have to think about ever having to claim money back – they want a guarantee that I’m managing it well to begin with! I felt that having to go through a Client Money Health-Check by an independent auditor each year would show that to my clients.”

Mehdi was impressed by just how thorough the process was, and how different it was to CMPI applications he’d made in the past where all he’d had to provide was a declaration from his accountant and a signed statement saying he agreed to act in accordance with the organisations’ financial recommendations.

“As a first step I had to provide proof of my professional indemnity insurance and that I was a member of professional organisation who would help my clients if they had any complaints. [Mehdi is a member of The Property Ombudsman.] Then I had to provide details for a credit check. And after that there was a comprehensive financial health check questionnaire where I had to provide details of how I run the business, including details like how many properties I manage and how I bank, as well as bank statements for certain months. This was analysed by a specialist client account auditor. “

The auditors were clearly happy with Mehdi’s accounting practices, and Ian Langley, CM Protect Director of Operations, made the trip to Hove to present Mehdi with his membership certificate: “The financial security demonstrated by Mr Jahani’s application meant that he passed all the checks. His client money, rents and deposits are receipted in, paid out or held in a designated client account. This protects client money as it can never be allocated or assigned by the bank to any of his business or personal accounts. It was also clear from the information and accounting records that he recognises that protecting, handling and processing client money is the most important aspect in running a professional letting business.”

Mehdi has no regrets about switching to the new insurance provider: “In my opinion CM Protect is the best option for client money protection insurance currently available on the market. I feel its independence from regulating bodies adds more credibility to the whole scheme. I found the CM Protect client money health check inspection was a robust and detailed process, so only agencies that can demonstrate that they’re following all the rules of client accounting could pass the checks. I feel that being able to use the CM Protect logo will help Prominence stand out by giving that extra financial reassurance to our clients.”.