Client Money Handling

Policy Statement

ALEXANDER REECE THOMSON LLP Date: 15 March 2023

STATEMENT OF POLICY

As an RICS-regulated firm, this written statement is produced in accordance with RICS Professional Standards and Guidance, UK, Client Money Handling (First Edition, October 2019) and statutory obligations.

Holding Clients Money

We confirm that the clients’ money will be held in a client money account, namely:

Bank: Barclays Bank
Name: ART LLP CLT SST
Sort Code: 20-40-50

Account Number: 23889963

We confirm that this firm will have exclusive control over the client money at the bankauthorised by the relevant banking regulatory body for the jurisdiction;.

We confirm that the account will be in the name of our regulated firm.

We will ensure that a client money account does not contain any sums other than thewhole or any part of client money paid into it, or any sums needed to replace money that has been withdrawn from the account by error, with accrued interest on such amounts.

We will not hold office money in a client money account unless it is a receipt of mixedmonies where the office money is awaiting transfer.

We will ensure that all client money accounts include the word ‘client’ (written in full) and the name of the firm in the title of the account, and that discrete client money accounts include an identifier (e.g. the client or property name) in the title of the account to easily distinguish it fromother accounts of the RICS-regulated firm.

We will ensure that money held in a client account is immediately available even at the sacrificeof interest, unless other arrangements are in the best interests of the client and the client has given express instructions in writing.

We will ensure that where the client has given instructions to hold monies in a high interest account with penalties for instant access, penalties are only paid out of the client account if the client has provided specific informed consent and this will not result in an overdrawn balance. Otherwise the bank must be instructed that penalties are to be applied to the office account.

We confirm the bank operating conditions in writing with the bank that holds the client money account, including acknowledgment from the bank that monies in the client money account, will not be combined with or transferred to any other account maintained by the firm. The bank is not entitled to exercise any set-off or counterclaim against money in that client money account for any sum owed to it for any other account of the firm.

We will ensure that the bank operating conditions confirm that the account title includes the word ‘client’ and any interest payable for monies held in the account will be credited to that account.

We will ensure that where a client requests that money is held in an account to which it and the firm has access, this is a bank account set up by the client, not a firm bank account.

We are obliged to advise clients who pay fees in advance for surveying services (but not property agent services in England) that this money is not covered by the Client Money Protection scheme.

We will disclosure all commissions earned by the firm while managing clients’ property.

Access to funds

We confirm that access to clients’ money is restricted to a Partner and senior employees of the firm.

Receipts of client money

In relation to receipts of client money, we will immediately identify whether any receipt is client or office money and will ensure all client money received is paid into a client money account promptly;.

We will ensure that when mixed monies are received, the receipt is paid into a client money account and the office money is transferred into the office account promptly.

We will ensure that where client instructions are to hold only part of a payment, the whole payment is placed into a client money account before transferring the relevant part out promptly.

Client Money / Office Money

Should it be agreed for the firm to place office money into a client money account to fund a payment on behalf of a client, the advance sum becomes client money on payment into the client account. It can only be repaid to the firm when funds are received from or on behalf of the client to enable the repayment.

Where a personal or office transaction for a principal (or principals), the money held or received on behalf of the principal(s) is office money. However, we acknowledge there may be other circumstances which may mean that the money is client money, such as where the transaction is on behalf of a principal and a third party. For example, if the member or regulated firm acts for a principal and their spouse, who is not jointly a partner in the practice, any money received n their joint behalf is client money.

Should the firm act for an employee, that person is a client of the firm, even if conducting the matter personally, and money received for that person will be client money.

Monies held by an LPA receiver will usually be placed in a discrete receivership account in the name of the receiver and will not therefore be client money held by the firm. The LPA receiver will have personal responsibility for the security of this money. However, the LPA receiver may choose to pay money into a firm’s client account. It will then be client money, but the LPA receiver will have the rights of a client to give instructions to the firm.

Interest due to a client should be paid into a client account to enable payment from the client account of all money owed to the client.

Cash and Cheques

It is the policy of the firm not to accept cash or cheque payments. Where such payments are made, cash will be swiftly returned to the payee. Cheques will be torn and returned to the payee.

Controls on the receipt of client money

We confirm procedures to identify and distinguish between client and office money.

All staff who open post are aware of the requirements of these procedures when money
is received. All cash and cheques received by post is logged and there is a procedures to check that all cash funds received are safely returned to the sender. Cheques are destroyed and the sender notified.

Whenever cash is received from the client, a pre-numbered duplicate receipt will be given to the client and a copy retained by the firm.

The firm has appropriate measures to ensure that cash and cheques are kept safe until they are retuned.

Where the firm accepts payments into the client money account by direct debit, the firm will ensure compliance with the requirements of the Direct Debit Guarantee scheme.

Unidentified Funds

Where the firm receives client money but cannot identify the client, we will review the unidentified funds as soon as possible and no later than one month from receipt.

The firm will retain a detailed listing of unidentified funds that includes:

(a)  the date the monies were received,

(b)  how they were received, i.e. direct banking,

(c)  the reference on the bank statement regarding the payer, and

(d)  The amount.

The firm will carry out an investigation into the unidentified funds, which will include:

(a)  checking the accounting records to see whether they have outstanding rental income/service charges/ground rents, and

(b)  checking to see whether any of the unidentified funds tie up with outstanding debts and target those tenants / leaseholders,

(c) writing to the last known address of the client / tenants or engaging a firm to follow-up the addresses to find the clients/tenants, and

(d) trying to repay the funds through the banking system wherever possible.

We will keep a record of our investigation, including evidence of the steps above and, if relevant, evidence that the funds were banked directly into the client account without any details.

Where the owner cannot be identified after three years from receipt and all avenues of investigation have been exhausted, the money will be paid from the client account to a registered charity.

We will obtain a receipt and an indemnity for all client money paid to a registered charity that would reimburse the firm for payment of the monies if a beneficiary is subsequently identified.

Where the firm has paid the money to a charity, the firm will remain responsible for ensuring that client money is repaid but will use the indemnity to seek reimbursement from the charity;

Payments from Client account

In relation to payments from the client account, we use each client's money only for that client's matters.

We ensure that client money is returned to the client immediately as soon as there is no longer any reason to retain those funds, and any further payments received (e.g. by refund) are paid to the client immediately; If the purpose for which particular funds were held falls away, and the management agreement with the client is not clear about that situation, we will take instructions on whether the money should be returned to the client or retained to cover any aspects of the further work.

We will ensure all payments from client money accounts are made to or on behalf of a client and on that client’s written instructions or as agreed in the management agreement.

When fees are due and payable, unless the client has given written authorisation for deduction of agreed fees without prior notification, we will send an invoice or other written notification of the costs incurred to the client before withdrawing money from a client money
account for payment of the firm’s fees, and then transfer those monies out of the client account promptly.

Where the client has given authorisation for fees to be deducted, we will provide written confirmation to the client of the amount being transferred before agreed fees are paid from the client account, unless there has been a written agreement by the client for agreed fees being deducted without prior notification being provided. We would refer to the firm’s terms of engagement which include information about when and how fees will be paid.

Money that has been paid into the client account in error (e.g. money paid into the wrong discrete client account or interest wrongly credited to a general client account) will be withdrawn or transferred from the client account promptly on discovery.

We will check that sufficient funds are held for the relevant client before making any payments on their behalf obtain written permission from clients for any direct debits and standing orders on general and discrete client bank accounts.

We will obtain written agreement from the client before bank costs are recharged to client bank accounts.

Payment controls

In terms of controls for authorisation of payments from a client account, the firm’s procedures include requirements for all payment requests to have supporting evidence that has been checked and authorised. This is to ensure an adequate segregation of duties in the client accounting function to prevent data tampering with the payments process.

We will ensure we have effective controls over setting up new supplier accounts on the system. Any new supplier requests or requests for a change to payee details will require dual authorisation. We will have checking procedures that take into account existing and emerging frauds, in particular using telephone checks to verify any information provided online.

Direct debits and standing orders will only be applied to general client accounts where there is a system to ensure that checks are made on the appropriate client ledger balance. This is to ensure there is enough money in the account for the direct debit / standing order to be paid.
The firm will consider maintaining a schedule of direct debit/standing order payments to monitor the payments each month.

How interest and bank charges are handled

We will account for interest or other benefits accruing from client money to the client, unless otherwise agreed with the client in writing.

We will further ensure that any charges or interest levied in respect of a general client account will not be debited to it but taken from an office account.

Accounting records and controls

In relation to accounting records and controls, we will keep records and accounts that show all dealings with the client money and demonstrate that all client money held by the firm is held in a client money account.

We have appropriate systems, procedures and controls to ensure payments into and transfers or withdrawals from a client account are in accordance with instructions agreed with the client.

We will complete regular client bank account reconciliations and be able to demonstrate that these are reviewed by a principal or senior staff member of the firm.

These written procedures for handling client money will be published on the firm’s website, and provide a copy of these to RICS or to any person who may reasonably require a copy free of charge.

We will ensure that overdrawn balances are prevented by the firm’s systems and controls, and if these do occur, investigate and rectify them immediately control and protect accounting systems and client data and adequately protect computer systems for access, firewalls, back- ups and disaster recovery.

We will ensure our accounting records include a cash book detailing all payments and receipts with a running balance for all client money accounts held.

For general client money accounts, the records will include a client ledger detailing all receipts and payments held for each specific client. All ledgers will include the client name and an appropriate description, e.g. the property address.

Accounting records will be completed chronologically and promptly.

We will ensure that the current balances at the total and individual client levels will always be available.

We will retain copies of client money account bank statements, copies of reconciliations and supporting documents relevant to the transactions in the client money accounts. We will retain these for at least six years.

Banking controls

We will keep evidence that the client bank account is under the exclusive control of the firm and of who can authorise transactions on the account readily available.

We will either obtain and be kept readily available a copy of the current bank mandate for each client account. It will be updated whenever there is a change to signatories or every three years if sooner.

Alternatively, the firm will obtain a letter from the bank that confirms: (a) the names of the client account signatories,
(b) any limits or joint signing authorities, and
(c) individuals authorised for online access if appropriate.

Where we hold more than three client bank accounts, a central list of all client accounts, or a number of centralised lists according to business divisions, will be maintained.

A withdrawal from a client account will be made only after a specific authority for that withdrawal has been signed by a signatory in accordance with the firm's procedures and systems. An authority for withdrawals from the client account may be signed electronically.

We confirm we have controls to ensure that only a principal of the firm is able to authorise new signatories to client money accounts.

Where the firm selects a sole signatory to a client money account, this will either be a principal of the firm or a person in a senior position in the company and remote from the day-to-day operation of the client account. Where we do not meet this criteria, we would limit authorised withdrawals from the client account with a second signatory.

The firm will be able to demonstrate that all signatories understand the requirements of this professional statement and the firm’s procedures for handling client money and are covered by the firm’s professional indemnity insurance.

Where instructions to the bank or building society to withdraw money from a client account are given over the telephone or by electronic means, there will be appropriate safeguards, such as passwords, to give adequate protection for client money.

Reconciliations

Reconciliations will be carried out regularly. A reconciliation will be completed once per calendar month and no later than six weeks after the date of the previous reconciliation. Where there are only one or two transactions per month, a quarterly basis will be undertaken.

The reconciliation will show the cashbook, ledger and bank statement balances with any reconciling items clearly explained. Any errors identified should be rectified immediately.

Client money account reconciliations will include a full list of: (a) dated unpresented cheques,
(b) dated outstanding deposits
(c) details of any other reconciling items, and

(d) for general client money account reconciliations, client ledger balances and the total of the balances;

We will use our accounts package to report and to retain evidence of the figures in the monthly reconciliations. These will be produced and retained digitally.

Reconciliations will not include regularly occurring adjustments or reconciling items more than three months old, except for unpresented cheques that should be no more than six months old. Cheques older than six months that have not been banked will be cancelled, written back and reissued.

The principal, or other senior staff member, who review the reconciliation will sign and date the reconciliation report to show compliance with the requirement in section. This will be by electronic signature, or an email confirming the review.

General controls

The firm’s procedures will ensure clear segregation of duties and responsibilities and a principal or appropriately-qualified person will oversee the client accounting function.

We will employ competent and knowledgeable staff to handle client money. The firm will demonstrate that appropriate checks are made when staff are employed and that all staff who handle client money are trained in the requirements of this professional statement.

The firm’s procedures will provide information to staff about how to report concerns about client money security to a principal. This will include information about whistleblowing to an appropriate outside body (e.g. RICS) if they are concerned about a risk to client money from the principal or if concerns are not responded to appropriately.

The firm will have appropriate cover for holiday and long-term absence of signatories and other staff with responsibility for client money accounting.

The firm should check that all departments and branches apply the same level of controls to handling client money, and that principals cannot and do not override client money controls.

Client Reporting

The frequency of client reporting will eb quarterly unless an alternative arrangement is agreed and set out in the management contract.

Contractor Commissions

Where we take commission on payments made to contractors, the commission charges will clearly identifiable on statements to clients to ensure clients are fully aware of the total commissions transferred from the client bank accounts,

Compliance

In relation to compliance, we will ensure compliance with all anti-money laundering legislation, rules and regulations for all receipts of client money.

We will ensure compliance with the mandatory requirements of the latest edition of the RICS professional statement Countering bribery and corruption, money laundering and terrorist financing.

We will obtain any certification required under legislation currently in force and follow any requirements in the legislation for display or publication;

We will ensure that any breach of these requirements is investigated and remedied promptly on discovery, including the replacement of any money improperly withheld or withdrawn from a client account.

We will record any breach of the mandatory requirements of this professional statement in writing in sufficient detail including any consideration of whether to inform RICS and any client affected by the breach.

Employees of the firm will make appropriate disclosures to a senior member of the firm or a regulator, immediately if they become aware of any risk of or actual misappropriation of client money by any person, and to keep a written record of that disclosure.

Partners and Employees will follow all procedures for handling client money at the firm. We will not override any controls in place to protect client money.

We acknowledge the duty to remedy breaches promptly or immediately rests not only on the person causing the breach, but also on firm.

We further acknowledge that the principals may have a professional obligation to replace missing client money from their own resources, even if the money has been misappropriated by an employee or another principal, and whether or not a claim is subsequently made on the firm's insurance.

Circulation

A copy of these firm’s written procedures for handling client money is available on request.