RICS Client Money Protection Scheme

Client Money Handling Policy & Procedure

Rule 8 of the RICS Rules of Conduct for Firms states that a firm shall preserve the security of clients’ money entrusted to its care in the course of its practice of business.

This policy confirms that in accordance with the RICS professional statement; Client Money Handling, 1^st Edition, October 2019, we understand that the obligations of EVC Property Management Ltd are to ensure:

• Client money is kept safe.
• Client money accounts are used for appropriate purposes only and;
• RICS-regulated firms have the appropriate controls and procedures to safeguard client money.

EVC Property Management Ltd is registered with the RICS Client Money Protection Scheme for Property Agents.

Holding client money

In relation to holding client money, we will:

• hold all client money in a client money account, over which we have exclusive control, at a bank or building society authorised by the relevant banking regulatory body for the jurisdiction
• ensure that our client money account does not contain any sums other than the whole or any part of client money paid into it. We will also ensure that we replace any money that has been withdrawn from the account by error, with accrued interest on such amounts.
• not hold office money in a client money account unless it is a receipt of mixed monies where the office money is awaiting transfer
• ensure that all client money accounts include the word ‘client’ (written in full) and the name of the firm in the title of the account, and that discrete client money accounts include an identifier (e.g. the client or property name) in the title of the account to easily distinguish it from other accounts of the RICS-regulated firm
• ensure that money held in a client account is immediately available even at the sacrifice of interest, unless other arrangements are in the best interests of the client and the client has given express instructions in writing
• ensure that where the client has given instructions to hold monies in a high interest account with penalties for instant access, penalties are only paid out of the client account if the client has provided specific informed consent and this will not result in an overdrawn balance – otherwise the bank must be instructed that penalties are to be applied to the office account
• confirm the bank operating conditions in writing with the bank that holds the client money account, including acknowledgment from the bank that monies in the client money account will not be combined with or transferred to any other account maintained by the firm – the bank is not entitled to exercise any set-off or counterclaim against money in that client money account for any sum owed to it for any other account of the firm
• ensure that where a client requests that money is held in an account to which it and the firm has access, this is a bank account set up by the client, not a firm bank account.

EVC Property Management Ltd holds its client account with HSBC.

Information to clients

We will provide the following information to clients in writing:

• confirmation that client money is held in a client money account including bank account details, that the RICS-regulated firm has exclusive control over the client money and whether the account is in the name of the regulated firm, a wholly owned subsidiary or an appropriately contracted third-party transaction service provider
• advice to clients who pay fees in advance for surveying services (but not property agent services in England) that this money is not covered by the Client Money Protection scheme
• disclosure of all commissions earned by the firm while managing their property
• how unidentified funds are dealt with
• a copy of the firm’s written procedures for handling client money.

Receipts of client money

In relation to receipts of client money we will:

• ensure all client money received is paid into a client money account promptly
• ensure that when mixed monies are received the receipt is paid into a client money account and the office money is transferred into the office account promptly
• ensure that where client instructions are to hold only part of a payment the whole payment is placed into a client money account before transferring the relevant part out promptly
• account for interest or other benefits accruing from client money to the client, unless otherwise agreed with the client in writing
• take prompt action to attempt to identify the owner of any unidentified client money received and pay this from a client money account to a registered charity where the owner cannot be identified after three years from receipt and all avenues of investigation have been exhausted
• obtain a receipt and an indemnity for all client money paid to a registered charity that would reimburse the firm for payment of the monies if a beneficiary is subsequently identified.

Payments from client account

In relation to payments from the client account, we will:

• use each client’s money only for that client’s matters
• ensure that client money is returned to the client immediately as soon as there is no longer any reason to retain those funds, and any further payments received (e.g. by refund) are paid to the client immediately
• ensure all payments from client money accounts are made to or on behalf of a client and on that client’s written instructions or as agreed in the management agreement
• when fees are due and payable, unless the client has given written authorisation for deduction of agreed fees without prior notification, send an invoice or other written notification of the costs incurred to the client before withdrawing money from a client money account for payment of the firm’s fees, and then transfer those monies out of the client account promptly
• check that sufficient funds are held for the relevant client before making any payments on their behalf
• obtain written permission from clients for any direct debits and standing orders on general and discrete client bank accounts
• obtain written agreement from the client before bank costs are recharged to client bank accounts.

Accounting records and controls

In relation to accounting records and controls, we will:

• keep records and accounts that show all dealings with the client money and demonstrate that all client money held by the firm is held in a client money account
• have appropriate systems, procedures and controls to ensure payments into and transfers or withdrawals from a client account are in accordance with instructions agreed with the client
• complete regular client bank account reconciliations
• publish written procedures for handling client money on our website and provide a copy of these to RICS or to any person who may reasonably require a copy free of charge
• ensure that overdrawn balances are prevented by the firm’s systems and controls, and if these do occur investigate and rectify them immediately
• control and protect accounting systems and client data and adequately protect computer systems for access, firewalls, back-ups and disaster recovery.

Compliance

In relation to compliance, we will

• ensure compliance with all anti-money laundering legislation, rules and regulations for all receipts of client money
• ensure compliance with the mandatory requirements of the latest edition of the RICS professional statement Countering bribery and corruption, money laundering and terrorist financing
• obtain any certification required under legislation currently in force and follow any requirements in the legislation for display or publication
• ensure that any breach of these requirements is investigated and remedied promptly on discovery, including the replacement of any money improperly withheld or withdrawn from a client account
• record any breach of the mandatory requirements of this professional statement in writing in sufficient detail including any consideration of whether to inform RICS and any client affected by the breach
• inform RICS, the client and the insurers of the RICS-regulated firm immediately if client money is misappropriated by any person.

Unidentified Funds

Where we receive client money but cannot identify the client, we will ensure unidentified funds are reviewed as soon as possible and no later than one month from receipt.

We will keep detailed listing of unidentified funds that includes:

• the date the monies were received;
• how they were received, i.e. cash, cheque, direct banking;
• the reference on the bank statement regarding the payer and the amount.

We will carry out an investigation into the unidentified funds, which should include:

• checking the accounting records to see whether they have outstanding rental income/service charges/ground rents and checking to see whether any of the unidentified funds tie up with outstanding debts and target those tenants/ leaseholders
• writing to the last known address of the client/tenants or engaging a firm to follow-up the addresses to find the clients/tenants and
• trying to repay the funds through the banking system wherever possible.

We will keep a record of our investigation including evidence of the steps above and, if relevant, evidence that the funds were banked directly into the client account without any details. We will take all reasonable steps to identify the owner or payee of the funds as soon as possible. If identification or repayment has not been possible within three years of receipt and the firm has paid the money to a charity, we will remain responsible for ensuring that client money is repaid but can use the indemnity to seek reimbursement from the charity.

Accounting records and controls

Our accounting records and systems are appropriate to the nature and volume of client account transactions. Our records include a cash book detailing all payments and receipts with a running balance for all client money accounts held. Our records also include a client ledger detailing all receipts and payments held for each specific client.

All ledgers include the client name and an appropriate description, e.g. the property address.

Current balances at the total and individual client levels are always be available. We retain copies of client money account bank statements, copies of reconciliations and supporting documents relevant to the transactions in the client money accounts.

Retaining Records

These records are retained for at least six years.

Banking controls

We can provide evidence that the client bank account is under the exclusive control of the firm and of who can authorise transactions on the account.

We aim to update the mandate whenever there is a change to signatories or every three years if sooner.

A withdrawal from a client account will only be made only after a specific authority for that withdrawal has been signed by a signatory in accordance with the RICS-regulated firm’s procedures and systems. An authority for withdrawals from the client account can be signed electronically.

At EVC Property Management Ltd there is a sole signatory to the client money account, who is a principal of the firm.

Controls on the receipt of client money

Client money can usually be identified and distinguish between client and office money, in terms of cheques by whom the payee is. The principal will also recognise the names of clients, leaseholders and tenants who will be responsible for payment of service charges or rent into the client account. The principal will also be aware if a fee account is payable and by whom. This will identify if the money is office money.

All cash and cheques received by post will be logged ticked to check that all funds received are banked.

It is our policy not to accept cash.

All cash and cheques should be banked promptly.

Payment controls

All payment requests will have supporting evidence that has been checked and authorised. This is to ensure an adequate segregation of duties in the client accounting function to prevent data tampering with the payments process. T

Any new supplier requests or requests for a change to payee details should require dual authorisation if possible.

Reconciliations

Reconciliations are carried out regularly, once per calendar month and no later than six weeks after the date of the previous reconciliation.

The reconciliation shows the cashbook, ledger and bank statement balances with any reconciling items clearly explained.

Any errors identified are rectified immediately.

General controls

The Principal of the firm who oversees the client accounting function is competent and knowledgeable in terms of handling client money.

Regular training in handling client money is provided.

If any member of staff has concerns about client money security this will be reported to a principal.

Interest and Bank Charges

This section will soon be updated.