Client Money Handling

Question 1

What is client money?

Answer 1

Money that an firm holds for or receives on behalf of another person, including money held by a the firm that is not immediately due and payable to the RICS regulated firm.

Question 2

What is a client account?

Answer 2

An account held by an RICS regulated firm or third party used to hold client funds on behalf of a client.

Question 3

What do the RICS rules of conduct require when handling client money?

Answer 3

Rule 1

Firms must keep client money safe and have appropriate accounting controls.

Question 4

What scheme must RICS regulated firms holding client money register with and what protection do these provide?

Answer 4

‘RICS Client Money Protection Scheme for Surveying Services’ provides client money protection in the event that the firm is unable to repay a clients money.

Question 5

What are the requirements/procedures which should be followed when setting up a client account?

Answer 5

Client accounts must be separately and clearly identifiable

The word ‘client’ and a unique identifier such as the name of the property must be on the bank account

Money in the account must be immediately available to the client on demand

Payment of interest must be agreed with the client and accounts kept in credit

Regular reconciliation checking payment received and made

Accurate records and running balance available

Money can only be withdrawn if properly required.

Question 6

When the owner of the client money cannot be identified in three years what should be done?

Answer 6

Pay this from a client money account to a registered charity where all avenues of investigation to establish the client have been exhausted.

Question 7

How should money be paid out of the client account?

Answer 7

used only for that client matters

ensure that as soon as soon as the money is no longer required it is returned to the client

all payment made to or on behalf of the client

when fees area due, send an invoice to the client before withdrawing the funds.

check there are sufficient funds prior to making payment

Question 8

What are the six main areas of good practice as set out in the RICS Professional Statement ‘Client Money Handling’

Answer 8

1. Holding client money
2. Providing information to clients
3. Receipts of client money
4. Payment from client account
5. Accounting records and controls
6. Compliance

Question 9

What are the options where a authorised individual is unable or otherwise restricted in
carrying out bank account functions due to sickness-related absence?

Answer 9

Additional authorised signatory

Power of attorney in place which delegates authority.