Latest News

Budget Approved by the Scottish Parliament

21 February 2019

Holyrood has voted yesterday (21 February 2019) to pass the Scottish Government’s Budget for the next financial year. Read More...

Are you doing everything in your power to push transactions through?

19 February 2019

NAEA Propertymark has been leading an industry group of agents, conveyancers and other stakeholders in recent months, looking at the house buying and selling process and considering barriers that could be removed and improvements that could be made. Read More...

The 2019 NAEA Propertymark National Conference – eye opening and inspirational

15 February 2019

A fantastic event, filled with insight, inspiration, and some rather questionable hats, thanks to one of our animated keynote speakers. Among the informative statistics, eye-opening case studies and weirdly wonderful anecdotes, there was a serious message around anti-money laundering and cartels behaviour, but ultimately the programme was aimed at inspiring everyone to be the best they can be. Read More...

 

 

Is your client money really protected?

Thursday 06 December 2018

If money is taken out of your client account without your knowledge, is that a crime? I’m sure as a member of Propertymark and subscriber to their CMP scheme your answer is going to be “Yes, of course it is!”.

What about your bank; can they ‘raid’ your client account? Without telling you, can they take and use your clients’ money to set off against your personal account, business account, overdrafts, personal or business loans? Unless your client account is ‘ring fenced’ the answer is “Yes, they can!”.

Jennifer Markham, CEO of The Lettings Partnership; the company behind Client Money HealthChecks explains further:

"As part of our HealthCheck process and also as a condition of Propertymark membership, agents must provide written proof in the form of a letter from their bank that their clients’ accounts are ‘ring fenced’.  The letter has to state that the bank has no right of set off – meaning that money held in the client account cannot be taken by the bank to pay either your business or personal debts.

"Worryingly an increasing number of agents are holding client money in accounts they believe are bona fide client accounts when in fact they’re not. Adding the word ‘Client’ to the account title does not make it a client account. Nor is it, or will it, be deemed to be a bona fide client account if an accountant signs off your annual accountant report if that accountant hasn’t got in their possession at the time of sign off a copy of that confirmation letter.

"Is your client money really protected? Have you or your accountant got client account status confirmation in writing from your bank?  If the answer is “no” contact your bank manager immediately. By all means call him or her, but make sure you follow it up by email or letter.  Ask them to provide you with a ‘no right of set off’ letter covering all of your client accounts. 

"Here at The Letting Partnership not only do we carry out Client Money HealthChecks, we also provide client accounting services to letting agencies across the UK and we know from experience that the majority of high street banks don’t have a ‘standard’ letter for letting agent client accounts. Some banks have even told us that there’s no need to have anything in writing as the word ‘client’ is in the account title! 

"Banks, like all large corporate organisations, always have watertight contracts in place with their customers – you and me. We sign account, loan and overdraft facility agreements which give the bank the right to close our account, call in our loan and withdraw our overdraft facility, in some cases almost at will.

"Hopefully neither you nor I will ever find ourselves in this position, but if the worse came to the worst then,as long as the client money remained intact and untouched, there would be a chance, however slim, that the business could survive. Written confirmation that the bank has no right of set off against your client account is irrefutable." 

Is your client money really protected? With your no right of set off letter “Yes, of course it is!”

The Letting Partnership are market leaders in client accounting and client money protection services and can be contacted by telephone on 01903 477900 or by email: info@thelettingpartnership.co.uk.