Client Money Rules and Protection of Lessee funds

The protection of service charge client monies is a primary concern for all lessees of residential blocks and we have set out below some useful links below concerning the regulation of these funds for Managing Agents.

The majority of Managing Agents are members of either ARMA (The Association of Residential Managing Agents) or Royal Institution of Chartered Surveyors (RICS). Both organisations set down rules that their members are required to follow regarding Client Money and these can be found on the ARMA and RICS websites.

Those Managing Agents that also undertake lettings for their clients are also likely to members of  The Association of Residential Lettings Agents (ARLA) and there are separate client money rules.

Protection of Lessee Funds

Protection of lessees' service charge funds under the Financial Services Compensation Scheme (FSCS) has received a boost with the publication of new guidance on their rights.

It has been confirmed that where such funds are held in one bank account, the £50,000 limit relates to each leaseholder's share of the fund - previously it was thought that the limit was £50,000 in total.

The guidance is titled FSCS – Treatment of service charges for residential property.

Plummer Parsons