About the OFT
Handling clients' money
The Estate Agents Act 1979 has specific requirements about how to handle clients' money. You'll need to know about:
- deposits
- payment of interest
- keeping client accounts.
You may be asked to hold money in the form of a deposit. This means that you are holding money on trust, and you will need to account for the client's money in a very precise way.
We recommend that you talk to your accountant about the detailed requirements for handling clients' money.
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Deposits
There are two types of deposit:
- pre-contract – a deposit is paid before the exchange of contracts in order to show a serious intention to buy
- contract – a deposit is paid at the exchange of contracts.
You must put the deposit in a special account, called a 'client account', which is set up for this purpose at a bank, or other financial institution.
- You can pay money from a connected contract, such as money used to buy carpets or curtains, into a client account.
- You cannot pay any other client money, such as rents, into this account.
Payment of interest
If the interest on a deposit of over £500 amounts to more than £10, you must pay it to the client.
Keeping client accounts
These are the basic rules for client accounts:
- you must keep detailed records of all transactions relating to a client account
- you must give detailed receipts for all money you receive
- your accounts must be examined and reported on by a qualified auditor within six months of the end of your accounting year
- you must produce your latest auditor's report, if asked to do so by an authorised person, such as a trading standards officer
- you must keep the accounts and records for six years after the end of the accounting period to which they relate
- if you take over the accounts and records from someone else, make sure that they are completed to the end of the transaction, and are kept for six years.
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