Client Money Reporting

If you are a Principal, Partner or Directors (PPDs) of a company that handles client money—or entrusts the handling of client money to an unnamed Client Accounting Service Provider (CASP)— you must provide client account documentation as part of your annual return and declaration.

The client money documentation should be easily accessible by the person responsible for your bookkeeping and allows us to review your client account in order to ensure the correct Client Money Protection (CMP) levy is applied. Client money reporting is required for each legal entity where you are a PPD.

Client money must be held in a bank or building society regulated by the Prudential Regulation Authority (PRA) with permission to accept deposits under the Financial Services and Markets Act 2000. More info...

What documents do I need to provide?

The information you provide will be dependent on the amount of client funds you hold excluding any insured deposits:

Client account balance under £1 million
Client account balance over £1 million or not part of Company Advantage

Client account balance under £1 million

We require the following documentation for all your client accounts as part of the annual return and declaration.

Client Account Ledger

To enable us to verify the client funds in the client account please can you provide a copy of your ledger, this is the document/system (e.g. CRM) that is used to reconcile the bank and ensure the funds held is accurate.

FAQs

What is a ledger?
This is a document or system (e.g. CRM) that reconciles the bank and ensure the funds held are accurate. A ledger is commonly used by a bookkeeper in order to reconcile against the client account.

It's important to keep accurate records of the funds you're holding in your client account. This relates to all client accounts held within the business, for example you may have separate client accounts that hold your rents and your insured tenancy deposits.

What if I don't have a ledger?
Start–up companies may not have a ledger in place when you begin to trade, we will be able to approve you application initially if you can show that you'll be recording client money correctly once start to handle it.

Existing business may simply use a spreadsheet to reconcile against the bank, other business may use a CRM in order to manage the client funds. The majority of CRM systems will be able to provide a report confirming the level of funds at a specific date.

Client Account Bank Balance

Confirmation is required of the client account name and balance, the date of the balance must be the same as the ledger. You may find this easier to use the date of your last reconciliation as you will likely have taken a copy of the ledger and bank at this point.

FAQs

What if I do not have any client money in my client account?
It is good practice to reconcile the bank and your ledger daily, although we appreciate this is not always practical, this would account for a low balance to be in your client account.

We would still expect to see a ledger and bank account information to verify that client funds are being processed in line with best practice.

Tenancy Deposit Scheme confirmation

We require confirmation from your deposit scheme of the funds registered. This can simply be a screenshot of the scheme dashboard to confirm the date and amount of funds registered.

Please note: If you are using an insured deposit scheme we will require all three documents based on both the insured deposits client account and your rents client account(s).

How to prepare your client account documents

We need to verify that the balance of client funds held in your bank account matches the amount recorded in your client ledger. To enable this, your client ledger, bank statement and tenancy deposit records must all be prepared to the same date.

This should normally be the date of your most recent client account reconciliation, provided it was completed no more than six weeks before you submit your annual return and declaration. All documentation must relate to the same date and must not be more than six weeks old at the point of submission.

Client account balance over £1 million or not part of Company Advantage

You will be required to provide an Accountant's Report if you have over £1 million in your client account(s), not including registered insured deposits. An Accountant's Report is also required if you are a client account service provider (CASP).

Completing the report

Reports must be completed by an accountants that is a member of one of the Financial Reporting Council's Recognised Supervisory Bodies (RSBs) and have a practising certificate. The accountant must also not have a connection to anyone at the company during the accounting period stated in the report.

Where client funds are held subject to the Estate Agents Act 1979, the Accountant’s Report must be completed by a registered auditor as per section 1239 of the Companies Act 2006. This refers to pre-contract or contract deposits in connection with the purchase of landed property or a connected contract. This does not apply if you only hold client funds in connection with lettings.

Download the Accountant's Report

Exemptions

Client money reporting is not required if your company is regulated by RICS or the Law Society of Scotland.

If you have Client Money Protection (CMP) with Money Shield, client money reporting is not required until you are ready to transfer your CMP to Propertymark.

Client Accounting Service Providers

A Client Accounting Service Provider (CASP) is a third-party company that manages client money on behalf of letting agents or property managers. There are certain conditions you need to meet if you use a CASP or if you are a company operating as a CASP.

My company uses a CASP
My company is a CASP

My company uses a CASP

If you entrust client money to another company to manage, you must still belong to our Client Money Protection (CMP) scheme and your CASP must regulated by us at Propertymark or by RICS. The CASP must be the only firm with the ability to make payments/withdrawals from the client account.

IS THE CASP CLEARLY IDENTIFIED IN YOUR CONTRACTS?
Provided the CASP handles all your client money and is clearly named in both your terms of business and tenancy agreements, you do not have to provide an Accountant’s Report. This is because liability for your client funds will lie with your CASP and not fall back to your company. The CASP’s legal name must be clearly identified in all references to client money. If they are not identified on your contracts, you will need to provide an Accountant’s Report for client money entrusted to them upon joining and annually thereafter.

My company is a CASP

To act as a CASP for a company regulated by Propertymark, your company must also be regulated by Propertymark or by RICS. This means you need to become a member of Propertymark and will be subject to our membership rules and company obligations. In addition, you must:

own and have sole control over each client account
keep client money in a specifically designated client account for each company you handle client money for
receive client money directly to your designated client account
submit an annual accountant’s report for all the client money your company handles
supply your member client with a copy of bank statements from the client account at least monthly
hold professional indemnity insurance with no exclusion or limitation in respect of fraud or dishonesty (fidelity cover relating to any third party's own money may be limited or excluded)
have a minimum limit of indemnity of £2m in respect of any one claim