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Client Money Handling Procedure

1. Purpose 

This procedure sets out how adpt Property Management Limited (“adpt”) receives, holds, manages and pays out client money in accordance with UK legislation and RICS best practice, with reference to the RICS Professional Standards and Guidance UK, Client Money Handling, First Edition. 

2. Definition of Client Money 

Client money includes any funds received and held by adpt that is not due directly to adpt for its own account, such as: 

  • Rent and service charge payments 
  • Tenant deposits 
  • Float balances for property maintenance 
  • Insurance premiums collected on behalf of clients 
  • Any other money received that does not belong to adpt 

3. Bank Accounts 

Bank accounts are held with Barclays Bank PLC which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority, registered oƯice 1 Churchill Place, London, E14 5HP. All accounts are under exclusive control of adpt Property Management Limited. 

All funds are held in one of the following accounts: 

  • General Client Account – a designated client bank account that holds funds relating to multiple clients. Used as a common receipts and a common payments account.
  • Discrete Client Account – designated discrete client bank accounts holding funds for a single client. “Client” and the name of the client is incorporated in the name of the account. 
  • Tenant Deposit Account – designated discrete client bank accounts for holding tenant rent deposits. Individual accounts are held for each individual rent deposit. The client and tenant names are incorporated in the name of the account. 

4. Interest and Bank Charges on Client Bank Accounts 

  • Interest earned on all discrete client accounts is allocated to the relevant client.
  • Interest earned on tenant deposit accounts is retained in the relevant tenant deposit account. 
  • Interest earned on the general client account is retained by adpt unless otherwise agreed in writing with the client. 
  • Account maintenance and transactional charges are paid for by adpt Property Management Limited.

5. Receipts of Client Money 

  • All funds are received into the general client account to centralise receipt processing and provide eƯiciency and control. 
  • Monies received into the general client account are a combination of electronic receipts, including CHAPS, BACS and Standing Order, and cheques that may be received by adpt on behalf of clients. 
  • Electronic receipts are posted to the accounting system one working day after receipt, at which point they are transferred into the relevant discrete client accounts.
  • Separate ledger accounts are maintained within the accounting system for each individual client bank account. 

6. Unidentified Receipts 

All necessary measures are taken to ensure funds received are allocated and transferred to the relevant client accounts one working day after receipt. However, if funds remain truly unidentified after 3 months of receipt, the funds will be returned to the sender. Truly unidentified refers to amounts where no tenant, client or supplier can be determined. 

7. Payments From Client Accounts 

  • All payments are made by BACS or CHAPS from the general client account.
  • Payments made from the general client account will typically relate to supplier payments, tenant refunds and transfers to clients regarding rent remittances. 
  • To fund the general client account to make these payments, monies are transferred from the relevant discrete client accounts. These transfers are made following the posting of an automated payment run, or other manually posted, approved payment, for example, for a tenant deposit refund. 

8. Authorisation of Payments From a Client Account 

All payments from a client account require prior approval before being processed. 

  • For the payment of supplier invoices, all invoices must first be approved via the internal approval matrix before the become available for payment. Once available for payment a draft payment run will be processed by the Client Accountant and sent for approval by the Head of Property Accounting. Once approval is received the Client Accountant will upload the payment to the online banking platform, to be approved in line with the banking mandate. 
  • Transfers to the client regarding rent remittances are made in line with the management agreement and are also first approved outside of the online banking platform before being processed. A draft client transfer report will be run by the Client Accountant and approved by the Head of Property Accounting before being uploaded to the online banking platform and approved in line with the banking mandate. 

All payments/transfers outside of these, for example tenant refunds/deposit refunds, are first approved outside of the online banking platform by the Asset Manager and Head of Property Accounting, before being uploaded to the online banking platform and approved in line with the banking mandate. 

9. Reconciliation of Client Accounts 

The general client bank account is reconciled on a weekly basis. The aim is for this account to have a zero balance as often as possible as funds should be transferred to the relevant discrete client account or paid out to relevant suppliers/clients/tenants, as per the ‘Payments From Client Accounts’ section above. Where there are reconciling items, this should be resolved as soon as possible and at least by the following reconciliation is completed, unless these funds fall within the ‘Unidentified Receipts’ classification. 

Discrete client bank accounts are reconciled on a monthly basis. System controls do not allow for reconciling items on these accounts. Where an error has occurred, this will be corrected immediately upon discovery. 

All reconciliations are reviewed by the Head of Property Accounting. 

10. Information To Be Provided To Clients About Monies Held On Their Accounts 

Details relating to the financial information provided and the frequency with which it is provided is set out in our management agreements. It is usual for a reporting pack including this information to be sent to clients on a monthly or quarterly basis. 

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