A disciplinary hearing involving Countrywide Residential Lettings is due to begin this morning at the RICS offices in Birmingham.
The charges are that the firm transferred over £10m worth of client funds that had not been claimed for six or more years from its client account to its office account.
According to the RICS, client money that is not claimed after six years should be given to charity.
The wording says that best practice with any surplus money is to ensure that every effort is made to trace the owners of the money; to hold the surplus money in a client suspense account; and to hold it for at least six years.
The RICS continues: “If, after six years, the client or owner of the money has not been found and no true claimants to the money have come forward, it may be donated to a registered charity.
“A receipt must be obtained for this transaction so should a true claimant come forward to collect the money it can be made available to them.
“Preferably the receiving charity should offer the donating firm an indemnity to enable the firm to recover a donation in the event of a claim.”
The advice is due to be replaced with a professional statement on client money handling on January 1.
Firms are told to ensure that they will comply with these new requirements.
Disciplinary panel hearings at the RICS can, it says, result in disciplinary action ranging from cautions to expulsions.
It has also emerged that the previous head of lettings at Countrywide, the highly respected John Hards, left at the end of last month, September 30. His departure was expected as he already come out of retirement once.
This morning, Countrywide issued a statement which said: “Countrywide can confirm that John Hards left the business at the end of September 2019.
“John joined Countrywide in 1994 with the acquisition of Nationwide and went on to lead the lettings business.
“He re-joined the business at the beginning of 2018 with a specific brief to help the group plan for the impact of the tenant fee ban. Working with key stakeholders across the business and leading a small programme team John delivered the brief and as a result we are set up for success in the post tenant fee ban world.
“We would like to thank John for everything he has done for this business and wish him every success and happiness for the future.”
The brief for sales and lettings is now held by Paul Chapman, not announced at the time but confirmed this morning in another statement.
In it Countrywide said: “Paul Chapman moved to national managing director for the group’s sales and lettings businesses in June 2019. His remit includes sales and lettings north, south, Hamptons and John D Wood & Co. alongside sales and lettings operations, marketing, land and new homes and auctions.
“Paul joined the group in 2011 as head of field operations and has since thrived in various roles before arriving at chief operating officer last year.
“With over 20 years’ experience in the property industry, Paul brings a wealth of experience and knowledge to this important role. He is a Fellow of the Royal Institution of Chartered Surveyors and holds an MA in business and management from Durham Business School.
“Prior to joining Countrywide Paul held senior management posts at Halifax Intermediaries and Colleys Surveyors within Lloyds Banking Group (LBG).”
https://www.rics.org/uk/upholding-professional-standards/regulation/firm-regulation/client-money/
Whoever is doing CWD’s PR (or whoever is stopping them doing their job due to paranoia) should be sacked – the more you try to hide ‘news’ the more the industry and journos will be all over it. Have you learned nothing from the Platt era dire news management?
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Surely this should have been sub judice until it is determined?
RICS normally keep very quiet about their disciplinary hearings for fear of bringing the reputation of a member/firm and RICS itself into disrepute.
I cannot recall a single case where the hearing itself was publicly announced once the hearing was concluded so to hear about this two days running seems a little vindictive, damaging and indiscreet.
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Well perhaps they need to be made an example of .
This wasn’t down the back of the sofa money but a deliberate transfer of clients funds I should imagine that the RICS are particularly annoyed as CWD had already admitted doing so in the 2018 accounts having transferred £4.5m back
They had an opportunity to have come clean then. Yet another example of continuning poor governance by an inept disconnected set of BODS .Pass the port.
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At a time when regulators are positing themselves for who will get the big gig, this has got to be embarrassing for RICS. Why has it taken them ten years to spot this breech of bye-law? Or is it only recently that 10m has been transferred from client accounts as part of tenant fee ban mitigation?
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“The RICS continues: “If, after six years, the client or owner of the money has not been found and no true claimants to the money have come forward, it may be donated to a registered charity.”
At least Countrywide could argue that, as a non-profit making organisation (for the last few years anyway) that they did the right thing…
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Someone will be having a bad day today – good luck with that one
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This stinks. Having just read Countrywide’s “explanation” that they can’t manage to trace even 1% of the £10,000,000.00 (that they never returned to their clients in the first instance!) demonstrates to me that there operating practices around client accounting are insufficient. It has to be questioned whether they are even fit to handle client money at all! I would be interested in how pro-active they were in getting client money back to there clients within the six year period…If they were on top of that they have been able to improve on there less than 1% success rate?
The..oh its okay because we “repaid all of the funds that had been transferred” and “nobody has been disadvantaged” is a bit like a someone robbing a bank, getting nicked, and then saying “its ok guv, I’ll just give the money back.. anyway, nobody got hurt during the robbery so its all ok right?”
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It’s bizarre. It’s client money and should have remained in the client account. I have one small amount of £155 that we have held for 3 years and we have phoned written and emailed the previous tenant to no avail but I wouldn’t dream of transferring it our Company account. I hope they are able to prove that they have attempted to contact the people to whom the money belongs.
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