Essential checks for letting agents

Planning a return to the office? The Government has been calling for businesses to return to their places of work in recent weeks.

Whatever an individual letting business decides is the best way to manage this return to the office, there are some essential checks business owners should carry out on client accounts to ensure a smooth transition when they do.

If letting agents make mistakes with client money the consequences could be serious, leading to fines or even losing the business. But there are some simple checks that can be made to mitigate against this risk:

Checks on client accounts

• Download a detailed report from the deposit protection provider and compare the number of deposits registered with the number of AST tenancies being managed. If tenant deposits are collected and protected on behalf of ‘let only’ landlords the number of deposits protected should be proportionally more than the rents collected for managed properties;
• Take the current number of managed lets, then multiply this number by the average rent per month. Then add any move in monies received. Next, download the client account statement in Excel or csv for the last month using online banking. Add up the payments and the two figures should be close;
• Run the trial balance report, or equivalent, from the software. This should tie up with the bank statement. If, for example, the balance report shows £60,000 in the bank, the bank statement should show the same amount.

Security checks

During the pandemic, lettings agents worked from home which meant team members had to take items such as card readers, log-ins and bank secure keys to carry out their jobs.

As agents return to the office a list of all these security items should be made and it’s crucial to ensure that that these are all accounted for. Any missing items must be cancelled with the bank immediately.

Another security step business owners should take is to check who has access to which accounts and consider whether this access should be removed now that employees are back or returning to the office.

Finally, we would advise agents to run a software audit which detects unusual changes in bank account details across all client accounts. These software audits can flag who has changed bank details and whether the details were then changed back to the original.

It’s also important to look out for employees changing bank details when it’s not their responsibility to do so or to look out for changes made to bank details at unusual times.

The letting agents which carry out all these essential checks when they return to the office will stand the best chance of avoiding any mistakes with client money or client accounting.

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