Client money rules for letting agents: what counts as a breach, and what the accountant's report has to show

In England, letting agents who hold client money need statutory client money protection, but the detailed handling rules often come from the CMP scheme, professional body or redress scheme rather than from one single Act. Scotland, Wales and Northern Ireland diverge sharply, so the answer changes if the agency is not operating in England.

What counts as a breach of the client money rules?

In England, the clearest statutory breach of the client money rules is holding client money without belonging to an approved or designated CMP scheme, because the rule is that “A property agent who holds client money must be a member of an approved or designated client money protection scheme.” A local authority can impose a financial penalty for that breach and the penalty “must not exceed £30,000.” If the money never left the account, the issue is usually different: approved CMP schemes must require members to “have and comply with written procedures for handling client money,” so poor records, missing reconciliations or unauthorised transfers can be a scheme-rule or membership breach even where no client has lost money. In Scotland, failure to comply with the Letting Agent Code can be taken to the First-tier Tribunal; in Wales, Rent Smart Wales licence conditions require CMP throughout the licence unless exempted in writing; in Northern Ireland, “you do not have to join a client money protection scheme.”

How often must a client account be reconciled?

In England, no letting-agent statute fixes a client-account reconciliation interval, but Propertymark members must reconcile at least every two calendar months and within ten weeks of the previous reconciliation. The English CMP approval conditions require members to “keep records and accounts that show all dealings with client money,” but they do not set a weekly, monthly or quarterly bank reconciliation deadline. That is why how often a client account should be reconciled depends on the rulebook that binds the firm: RICS client-money guidance says “A reconciliation should be completed once per calendar month and no later than six weeks after the date of the previous reconciliation,” while Propertymark’s membership rule says members must, “At least once every two calendar months (and within no later than ten weeks of a previous reconciliation), reconcile the balance on their Client’s cash book(s).” Scotland is stricter in law: “You must regularly record and monitor all transactions and reconcile these monthly as a minimum.” Wales and Northern Ireland do not set a letting-agent reconciliation interval in legislation.

How much interest do you have to pay clients on money you hold?

The £500/£10 interest threshold widely quoted for letting agents comes from the Estate Agents (Accounts) Regulations 1981, which governs property sales, not lettings client money — no letting CMP instrument in any UK nation sets a numeric interest threshold; agents must simply repay client money plus interest earned “where feasible.” In England, approved CMP scheme rules must require the agent to “repay any client money, including where feasible any interest earned, without delay if there is no longer any requirement to retain that money or the client requests it.” The £500/£10 test applies only where “the amount of the sum held exceeds £500” and the interest “could have been” at least £10 under the 1981 estate agency accounts regime, so it is the wrong rule for letting client money. In Scotland, unless agreed otherwise in writing, “you should where feasible credit interest earned on any client account to the appropriate client.” Wales has no separate numeric letting threshold, and Northern Ireland has no statutory CMP requirement.

What does a client money audit require?

No law requires a client-money audit for letting agents in England; what many agents call the client money audit is Propertymark’s own Accountant’s Report, required only for qualifying Propertymark firms rather than every letting agent. The English statutory CMP conditions require records, not an auditor: approved schemes must require members to “keep records and accounts that show all dealings with client money.” Scotland requires monthly reconciliation, not an independent audit, because its Code says agents must “regularly record and monitor all transactions and reconcile these monthly as a minimum.” Propertymark’s live Accountant’s Report trigger is narrower than many agents assume: “You will be required to provide an Accountant's Report if you have over £1 million in your client account(s), not including registered insured deposits.” Where it applies, the accountant must form “an opinion as to whether, during the period being reported, the records and controls have been suitably maintained.” Wales and Northern Ireland do not impose a statutory letting-agent client-money audit.

When is the Propertymark accountant's report due?

The Propertymark accountant’s report is due within six months after the firm’s financial year end, or within 20 weeks after Propertymark requests it, and missing the applicable deadline by 28 days terminates every PPD membership responsible for the firm. Propertymark’s routine rule says “A PPD member firm must provide either an Accountant’s Report as specified in clause 1.26 or a ‘HealthCheck’ within the 6-month period following their financial year end.” Its request-based rule says the report “must be submitted to Propertymark by the member’s firm no longer than 20 weeks after request.” The consequence is unusually hard-edged: “Failure to provide an Accountant’s Report within twenty-eight days of the deadline will result in termination of all memberships of all PPD members responsible for the firm.” That Propertymark deadline is not a general letting-law audit deadline; the statutory six-month audit clock in the Estate Agents (Accounts) Regulations 1981 is for estate agency accounts, not lettings CMP. Scotland, Wales and Northern Ireland do not create a Propertymark deadline by statute.

What happens to your client money protection and redress membership if a director is charged with fraud?

A director being charged with fraud does not automatically end statutory CMP eligibility in England, Scotland or Wales, but it can put The Property Ombudsman redress membership at risk because TPO’s deed asks about charges, not just convictions. In England, the statutory position remains that “A property agent who holds client money must be a member of an approved or designated client money protection scheme”; the CMP regulations do not say a mere charge removes eligibility. Scotland’s letting-agent registration fitness test refers to offences “involving fraud or other dishonesty,” and the key practical trigger is conviction rather than an untried charge. Wales requires regard to whether a person has “committed any offence involving fraud or other dishonesty,” which is again not the same as being charged. TPO is different: its 2026 deed requires confirmation that no director or manager “has been charged (but not yet tried),” and false information “may result in my TPO membership being VOID and membership terminated.” Northern Ireland has no statutory CMP membership requirement.

Last reviewed August 2026.

Sources

• Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019 — “A property agent who holds client money must be a member of an approved or designated client money protection scheme.” Source
• Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019 — “(b)must not exceed £30,000.” Source
• Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018 reg. 5 — “(a)have and comply with written procedures for handling client money;” Source
• Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018 reg. 5 — “(d)keep records and accounts that show all dealings with client money;” Source
• Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018 reg. 5 — “(e)repay any client money, including where feasible any interest earned, without delay if there is no longer any requirement to retain that money or the client requests it;” Source
• Housing (Scotland) Act 2014 s.48 — “A tenant, a landlord or the Scottish Ministers may apply to the First-tier Tribunal for a determination that a relevant letting agent has failed to comply with the Letting Agent Code of Practice.” Source
• Letting Agent Code of Practice (Scotland) Regulations 2016, schedule para. 123 — “You must regularly record and monitor all transactions and reconcile these monthly as a minimum.” Source
• Letting Agent Code of Practice (Scotland) Regulations 2016, schedule para. 125 — “Unless agreed otherwise in writing by the client, you should where feasible credit interest earned on any client account to the appropriate client.” Source
• Letting Agent Code of Practice (Scotland) Regulations 2016, schedule para. 126 — “You must hold a client money protection insurance policy unless you can demonstrate equivalent or greater protection through another body or membership organisation.” Source
• Rent Smart Wales licence conditions — “The licensee must have and maintain throughout the period of their licence client money protection, professional indemnity insurance and membership of an independent letting and management redress scheme (as accepted by Rent Smart Wales) unless an exemption or concession has been granted in writing by Rent Smart Wales.” Source
• GOV.UK client money protection scheme for property agents — “Northern Ireland - you do not have to join a client money protection scheme” Source
• Propertymark Conduct and Membership Rules — “b. At least once every two calendar months (and within no later than ten weeks of a previous reconciliation), reconcile the balance on their Client’s cash book(s):” Source
• RICS client money handling guidance — “A reconciliation should be completed once per calendar month and no later than six weeks after the date of the previous reconciliation.” Source
• Estate Agents (Accounts) Regulations 1981 — “(2) The obligation imposed by subparagraphs (a) to (c) of paragraph (1) above shall arise in any case where the amount of the sum held exceeds £500 and the interest which is, or, as the case may be, could have been, earned on the money for the person in question during the period for which it is held for him by keeping it in a separate deposit account at the institution concerned is at least £10.” Source
• Propertymark Accountant’s Report page — “You will be required to provide an Accountant's Report if you have over £1 million in your client account(s), not including registered insured deposits.” Source
• Propertymark Accountant’s Report template — “Accountants are required to form an opinion as to whether, during the period being reported, the records and controls have been suitably maintained by the Member Firm or (if using one) its CASP.” Source
• Estate Agents (Accounts) Regulations 1981 reg. 8 — “Any person who is required to keep accounts under Regulation 6 above shall draw them up in respect of consecutive accounting periods and have them audited by a qualified auditor within six months after the end of each accounting period.” Source
• Propertymark Conduct and Membership Rules — “The Report referred to in this Rule must be submitted to Propertymark by the member’s firm no longer than 20 weeks after request (if completing the HealthCheck, please ensure information is supplied to The Letting Partnership, allowing sufficient time to ensure the final report or HealthCheck is received by Propertymark in accordance with this rule).” Source
• Propertymark Conduct and Membership Rules — “A PPD member firm must provide either an Accountant’s Report as specified in clause 1.26 or a ‘HealthCheck’ within the 6-month period following their financial year end as specified in clause 1.27.” Source
• Propertymark Conduct and Membership Rules — “Failure to provide an Accountant’s Report within twenty-eight days of the deadline will result in termination of all memberships of all PPD members responsible for the firm.” Source
• Housing (Scotland) Act 2014 s.34 — “(i)involving fraud or other dishonesty,” Source
• Housing (Wales) Act 2014 s.20 — “(a)committed any offence involving fraud or other dishonesty, violence, firearms or drugs or any offence listed in Schedule 3 to the Sexual Offences Act 2003 (offences attracting notification requirements),” Source
• The Property Ombudsman 2026 membership deed — “ii) No director, manager, partner or person associated with the business has any unspent convictions or has been charged (but not yet tried), of any criminal offence other than a motoring offence.” Source
• The Property Ombudsman 2026 membership deed — “I understand that if any information provided in this application is incorrect or false it may result in my TPO membership being VOID and membership terminated.” Source