Client Money Protection Policy
Background
This document sets out our approach to Client Money Protection in respect of letting agency work and property management work in England. It therefore concerns client money held in connection with business activities when acting as residential letting agents in England. Client money protection is a form of insurance that protects the landlords and tenants’ money held by a letting agent. If the money is misappropriated, lost, or stolen or if the agent goes into administration, landlords and tenants can contact the agent’s client money protection provider to make a claim for compensation.
Definitions
"Client Money" In respect of a Scheme, money a. received by a letting agent in the course of English letting agency work within the meaning of Section 54 of the Housing and Planning Act 2016, or English property agency work within the meaning of Section 55 of that Act; and b. held on behalf of another person but excluding any money held in accordance with an authorised tenancy deposit scheme within the meaning of Chapter IV of Part 6 of the Housing Act 2004 (see Section 212 of that Act)
"Client Money Account" In respect of a Scheme, an account which: a. does not contain any sums other than the whole or any part of client money paid into it, or such sums of money as may be necessary to replace any sum which by error has been withdrawn from the account, together with accrued interest on such amounts; and b. includes in its title the word "client" or an appropriate abbreviation of that word and whether such account is held in the name of the Registered Firm or a wholly owned subsidiary company of the Registered Firm, or a sister company of the Registered Firm that holds money in respect of the Registered Firm "Property Agent" In respect of a Scheme a. a person who engages "in English letting agency work" within the meaning of Section 54 of the Act. "Letting agency work" means things done by a person in the course of a business in response to instructions received from: i. a prospective landlord seeking to find another person to whom to let housing, or ii. a prospective tenant seeking to find housing to rent but does not include any of the following things when done by a person who does nothing else within the above descriptions: – publishing advertisements or disseminating information; – providing a means by which a prospective landlord or a prospective tenant can, in response to an advertisement or dissemination of information, make direct contact with a prospective tenant or prospective landlord; – providing a means by which a prospective landlord and a prospective tenant can communicate directly with each other "English letting agency work” means letting agency work that relates to housing in England or b. a person who engages in "English property management work" within the meaning of Section 55 of the Act. "English property management work" means things done by a person in the course of a business in response to instructions received from the client where i. the client wishes the person to arrange services, repairs, maintenance, improvements or insurance in respect of, or to deal with any other aspect of the management of, premises on the client's behalf, and ii. the premises consist of housing in England, let under a tenancy other than a person who engages in that work in the course of the person's employment under a contract of employment.
"Property Agents Client Money Protection Scheme" A scheme which enables a person on whose behalf a Property Agent holds money to be compensated if all or part of that money is not repaid in circumstances in which the scheme applies, this meaning being given as set out in Section 133(4) of the Act, and which is approved by the Secretary of State of the Ministry of Housing, Communities and Local Government, and complies with the terms of the Regulations
"Regulations" The Client Money Protection Schemes Property Agents (Approval and Designation of Schemes) Regulations 2018 (SI 2018 No. 751) as amended
Principles
• Foxdog Properties Ltd complies with the relevant regulations in respect of client money protection.
• At this time of writing, Foxdog Properties Ltd is a member of Client Money Protect (CMP), a government approved client money protection scheme.
• Foxdog Properties Ltd complies with the terms of the CMP scheme which can be found at https://www.clientmoneyprotect.co.uk/wp-content/uploads/2021/12/CMP-scheme-rules.pdf
• Foxdog Properties Ltd uses the government approved custodial deposit scheme provided by The Deposit Protection Service (DPS).
• At least two authorised persons are required to process any financial transaction in connection with the client money account(s) which exceeds £2,500.
• Any misappropriation of client money is quickly identified in post-transaction reconciliation and reported to one of the Directors.
• The operation and authorisation of a client money account is set out in the contract between Foxdog Properties and the property owner.
• The holding of client money records is covered by our privacy policy.
Client Money Protect procedure
1. Have separate client bank accounts solely for the use of all client money
2. Only hold client monies in UK banking institutions authorised by the Financial Conduct Authority and that are covered by the Financial Services Compensation Scheme and ensure that funds are available within a maximum of 31 days
3. Have the title of their client money bank account easily distinguished from other accounts of their firm with the words ‘client account’ clearly stated
4. Have written confirmation from their bank(s) that all client money is held by your firm as an agent and that the bank is not entitled to combine the client money account(s) with any other account or to exercise any right of set-off or counterclaim against money in that account in respect of any sum owed to it on any other account by the firm
5. Have and maintain relevant systems and controls which enable you to monitor and manage client money transactions and any credit risk arising, including but not limited to regular internal account audits
6. Have accounting systems and client data securely controlled and protected
7. Obtain clients’ written approval to make payments from their accounts 8. Pay any client money inadvertently paid into the firms business account into the firms designated client money bank account within three business days of the money being received by the firm
9. Nominate authorised staff to handle client money
10. Ensure records show all dealings with client money
11. Ensure that all procedures for handling client money are complied with and clearly written down and provided free of charge to your clients, preferably in your terms of business or management agreement
12. Reconcile client accounts together with bank and cash balances at regular intervals in order to demonstrate control over the accuracy and completeness of accounting records
13. Ensure there are sufficient funds in the client account to pay amounts owing to clients as they fall due under the Members’ terms and conditions of engagement with the client
14. Repay any client money, including where feasible any interest earned, without delay if there is no longer any requirement to retain that money or the client requests it
