Letting agents will no longer face an uphill battle with banks when opening the Pooled Client Accounts (PCAs) required under the Client Money Protection (CMP) regulations in England, Scotland and Wales and Propertymark membership requirements in Northern Ireland.
These require agents to ensure that client money is held in an account or accounts identified separately from any of those used to hold money belonging to the company.
But for a long time now many letting agents have struggled to open a PCA because banks were incorrectly assuming they were a higher risk due to their lack of registration with HMRC for Anti-Money Laundering supervision.
This, many agents have had to explain to banks often without success, is because they are not required to do so unless they handle tenancies of more than €10,000 a month.
Propertymark has been lobbying the financial services forum the Joint Money Laundering Steering Group (JMLSG) over the summer as it has consulted on proposals to solve this problem.
“We are pleased to announce that following our response, improved guidance has been published to make it easier for letting agents to meet their legal obligations,” says Propertymark.
“While the new guidance is not legally binding, it does receive HM Treasury approval and this is an important step forward for hundreds of letting agents across the UK.”
Propertymark says the revised guidance now acknowledges the distinction between the AML and CMP requirements for letting agents.
“This means that banks should be considering whether the customer is subject to the AML Regulations, but crucially also other regulatory or professional conduct obligations such as client identification rules, professional conduct rules relating to dealing with funds in PCAs or client money protection regulations,” says Propertymark.