A PropTech supplier says it’s created a solution to letting agents and landlords who must remain compliant and who want to avoid hurdles put up by some banks over client accounts.
Since 2019 many banks have contacted letting agencies, saying their undesignated client accounts would have to be closed. The agents are typically faced with replacing the accounts with individual designated ones - time-consuming and laden with red tape - or shifting their business to banks not requiring designated accounts.
The banks’ crackdown has come after the requirement that any lettings or management business handling clients’ money must be part of an approved Client Money Protection scheme in order to operate, and tightening up of Anti-Money Laundering regulations.
Now the PropTech platform Lettspay says it provides an automated 24/7 banking solution which is unique because it is registered with the Financial Conduct Authority, giving banks the reassurance that controls and processes are regularly audited.
Lettspay then uses technology to create, in the name of each agent, an automated and designated client account for each landlord. As it acts as an intermediary, there will be no bank charges on letting agents, who are thus not required to have an undesignated client account.
The platform uses the latest finance technology to create the separate accounts for landlords and generates individual sort codes and account numbers. Tenants are notified automatically by the platform to pay their account. When a payment is received, funds are automatically allocated, with agents approve payouts to landlords or relevant third parties.
The platform communicates to the tenant that the payment has been received and produces an automatic statement for the landlord. The automation of the process saves agents time and makes it far easier to manage portfolios of clients.
The platform is also able to manage payments to contractors, deposit accounts and HMRC for tax.