Countrywide has received a fine by the Royal Institution of Chartered Surveyors (RICS) following the admission that they did not follow rules on client money protection.
As reported in Property Industry Eye Countrywide was told to pay a £100,000 fine at a disciplinary hearing in Birmingham.
In a decade-long period between 2008 and 2018, Countrywide reportedly transferred over £10m of client funds which represented unclaimed and unidentified client balances which were unclaimed for six years or more into their office account.
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This is not permitted and was found to be a failure to preserve the security of client funds.
The firm was found to have “represented a serious and prolonged disregard” towards their professional obligations set out in RICS’ client money guidance document and was liable to disciplinary action in accordance with RICS Bye-Law 5.3.2 (c).
RICS released a statement from its director of regulation for the EMEA region Luay Al-Khatib stating: “RICS’ regulation is key to delivering confidence in property and construction services.
“Consumers need to have trust in professionals, and when property agents do not hold their clients’ money securely it seriously erodes that trust.
“Today’s hearing shows the importance of RICS’ robust and independent regulation within the property sector and sends a clear message to the sector that failing to observe appropriate standards is not acceptable and has consequences.
“I am pleased that Countrywide has engaged constructively with us and committed to improved controls to preserve the security of client money.
“We will work closely with them to ensure these are implemented.”
Countrywide also issued a statement on the matter which describes how “nobody has been disadvantaged” but they decided to “resolve the RICS matter immediately through a full transfer”.
Countrywide added: “Back in 2008 we started to accumulate many thousands of individual small amounts on client accounts in our lettings businesses, where funds over six years old could not be traced to source.
“Some would have been rightly Countrywide funds and others small amounts of landlord/tenant sums that could not be traced.
“It was agreed at the time to move these untraceable amounts to an office account and put in place an indemnity that, should ever a recipient be identified, the amount would be paid across.
“In reality less than 1% were ever traced after six years. Immediately we paid over the amount due and customers did not suffer any loss.
“After ten years of audits an issue was raised in 2018 that this may not be in accordance with RICS Rules.
“Countrywide repaid all of the funds that had been transferred from office to unnamed client accounts.
“Importantly nobody has been disadvantaged but we decided to resolve the RICS matter immediately through a full transfer.”