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Banks Red Tape: Breakthrough for agents on Pooled Client Accounts

ARLA Propertymark says there has been a breakthrough on the banking clampdown on pooled client accounts - a pain in the neck for agents for some time.

Banks have been judging letting agencies as higher risk when applying to open PCAs if those agents are not registered with HMRC for Anti-Money Laundering supervision.

However, letting agents aren’t even required to register with HMRC for AML supervision unless they deal with one or more transactions above 10,000 euros per month. 


This means many agents are being penalised by banks despite abiding by HMRC rules. 

Now an announcement from ARLA says: “We are pleased to announce that ... improved guidance has been published in order to make it easier for letting agents to meet their legal obligations.”

ARLA says that while the new guidance is not legally binding, it does receive HM Treasury approval and is therefore an important step forward for hundreds of letting agents across the UK.

The revised 2020 guidance now acknowledges the distinction between the AML and CMP requirements for letting agents. 

An ARLA statement says: “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.”

It continues: “Propertymark will continue to work with agents who encounter difficulties with banks in setting up client accounts, but the improved guidance should make it easier for letting agents to obtain PCAs going forward.”

Timothy Douglas, the association’s policy and campaigns manager says: “We know that many agents have found it very difficult to open client accounts with no legal requirement for all letting agents to register with HMRC for AML supervision. Consequently, this makes it very difficult for letting agents to adhere to the Client Money Protection rules.

“With the legal requirements on letting agents being made clearer to banks, they should now be able to distinguish between the two sets of regulations whilst taking reasonable measures to establish and document the purpose of the Pooled Client Accounts.”

  • Neil Moores

    Surely 99.9% of letting agents have over 10,000 Euros a month going through their client accounts?

    David dOrton-Gibson

    But not in a single transaction. Therefore it only applies to very high value properties.

    Matthew Payne

    It's single or linked transactions, but ultimately apply to one address so still higher end. The threshold wasn't the issue though for the bank, it was agents choosing not to register with HMRC if they didnt need to, which when refused, then doing so, would have been the most straightforward solution to get an account open.

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    • 10 September 2020 08:24 AM

    You'd have to be a very silly LL to allow LA to have anything to do with deposits and rents.

    Those can be paid directly to the LL and the LL can pay the monthly LA invoice.

    No way would I ever allow a LA to receive the deposit and rent BEFORE passing onto me.
    Few LA will do this which is why LA haven't had any business from me for 10 years.
    Their loss.

    It would be acceptable to have a DD arrangement for the monthly management bill.

    No LL should trust CMP accounts


    That, Paul, is why despite respecting you posts, we would never do business were we in the same area.

    You obviously do not trust Letting agents yet expect them to trust you. Why should they? There are more landlords who get prosecuted than agents who run off with the cash.

    Matthew Payne

    The lack of trust is unfounded today anyway and harks back to decades past when there was less regulation and professionalism likewise - akin to the age of dinosaurs for agents and their clients alike, so much has changed.

    Unless a lettings agent has the deliberate intention to run off to Mexico with some (not all) of the cash then it is virtually impossible to empty a client account by being a bungling fool such is the advancement and capabilities of commercial banking and CRMs. So it would be possible to fool the system for one day, but an individual dodgy agent would only be able to make off with about £5k, IF the company had the right processes in place.

    I had defaults in place on my client acct that limited individual payments numbers and sizes, duplicate names and accounts, changes of account details, I could see that days payment run on my phone and stop it if I wanted to, and above all, all payments were reconciled to the bank the following morning, so any theft would be spotted immediately. Daily recs on top meant it would be easier to rob your high street branch of Lloyds than steal from my client account, and I firewalled it so I could not make unilateral payments myself, like the 2 key thing on a nuclear sub. Perfect tranparency. Further still, CA balances are insured, hence CMP even if you were to be unlucky to use an unregulated back street LA who had no processes, no CRM and worse still pictures of South America on his desktop.

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    Mr Barratt obviously doesn’t know the strict rules in place for licensed agents who are also registered with the HMRC.

    • 10 September 2020 10:28 AM

    I am fully aware but despite these measures there are clearly still issues.
    My preference is not to risk my money.
    In my bank account there is NO risk.
    So as the LL I control the money NOT a 3rd party no matter how insured they allegedly might be.
    Over the past 11 years I have probably saved myself tens of thousands of pounds in LA management fees.
    I'll keep the money in my pocket NOT a LA!

  • Cris Fowler

    It sounds like the letting agents have dodged the Barrett Bullet to me.


    I like that CRis. Dodged the Barrett Bullet. Catchy!

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    • 10 September 2020 10:31 AM


    Should I need a LA I have no problem with using one.
    But I would never allow a LA to receive any monies before they came to me.
    So rent and deposit comes to my bank account.
    I then pay a monthly LA invoice.

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    Why should any LA trust you to pay. I would not deal with a landlord who did not trust me.

    • 10 September 2020 11:06 AM

    It is a different level of trust.
    A monthly management fee of £50 I may not pay or a LA running off with my deposit and monthly rent.
    It is the LA that needs to accept more trust is needed for them rather than them of a LL.

    If a LL doesn't pay then the service is cancelled.

    LL who wish to maintain the LA service will pay.
    Unlike tenants who can use the rental service for nothing!!

    Any joe can walk off the street and become a LA.

    Not gonna risk my money with unregulated people.
    I'll pay an invoice for a service even in advance but no way is a LA gonna get their grubby mitts on my deposit and rent.
    That's just the way it is.
    If that means no LA like my terms of business I'm fine with that.

    I've managed for 11 years without LA.
    I reckon I will until I am out of this now very dodgy business enterprise at least as a BTL LL!

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    Unregulated? Is this the start of your ne career as a comedian, Paul?

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    • 10 September 2020 11:25 AM

    Unfortunately it is perfectly possible for anyone to start up as a LA.
    The barriers to entry are very low as evidenced by the many occasions when LA do a runner.

    It is the LL that principally suffers.

    There really should be a licensing system with compulsory insurance like Solicitors have.
    I also believe similar should be the case for EA and LL.

    That would drastically reduce the size of the PRS as lots of current participants would fail licensing protocols.
    Surely no bad thing.
    A legal PRS rather than one that is currently built on fraud and other criminality.

    As an example do LA check that LL have CTL for DSS tenants!?

    I suggest they don't.
    That is fraud.


    Research, Paul. They have to have CMP, PII and be members of a Redress scheme. Perhaps you would like to hold their first-born as security too? The number of agents who do a runner are very low indeed, whereas the number of landlords prosecuted . . . Time to look at the beam in your eye, Paul.

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    • 10 September 2020 11:36 AM

    Nope I know myself.
    Until LA are licenced like Solicitors where even if the annual insurance premium isn't paid the cover is still there.
    That isn't the case with PLL and CMP.
    There are still too many holes for the rogues to do a runner.

  • Matthew Fine

    Paul, correct me if I am wrong but it is not YOUR deposit, you are just a stakeholder until the end of the letting. I guess you will probably run out of estate agents to use if that is your attitude.


    Yes, Matthew, landlords and agents need to accept that the law clearly states that the deposit belongs to the tenants and any claim against it needs to be proved.

    We use AIIC members and get photos (time and date stamped) plus a written inventory initialled on every page on check in. That avoids the usual "It was like that when we moved in".

    • 10 September 2020 12:38 PM

    Nope any deposit is mine which I protect with mydeposits insurance version.
    Providing the tenancy when it ends doesn't warrant any deductions then the tenant receives their full deposit back.

    Invariably I have needed to retain the full deposit or make some minor deductions.
    Because I have the deposit in my bank account then it is very difficult for tenants to object to legitimate deductions.
    My deductions have always been correct. No tenant has ever objected to these deductions.

    I would suggest that it would be useful for photos to be taken by the LL and tenants .
    Then they email eachother with their photos.

    No dispute then!


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