Redress schemes investigate complaints regarding poor service and hidden fees charged by letting and property management agents.
The three approved schemes include; The Property Ombudsman, Ombudsman Services Property and The Property Redress.
David Cox, managing director of Association of Residential Letting Agents, said:
"We welcome the introduction of compulsory redress. The industry needs regulating and this is the first step towards that. As a matter of course, letting agents hold money on behalf of the tenant and landlord but depending on the agent you choose, you could stand to lose your money as not all are covered by client money protection.
"ARLA is calling for all agents to have client money protection, which in many ways is similar to the Financial Services Compensation Scheme. For example, with ARLA Licensed agents, in the unlikely event a member goes bust or misappropriates a client’s funds we can cover losses for both the landlord and tenants."
