£100,000 fine for Countrywide over funds controversy

It’s now emerged that Countrywide has to pay a £100,000 fine to the Royal Institution of Chartered Surveyors after breaching guidelines on the protection of tenants’ funds. 

The agency group admitted two charges of breaching RICS’ codes.

One was that £10,093,866 of unidentified client funds in Countrywide’s lettings division - which had remained unclaimed for six years or more - had been diverted from the agency’s client account to its office account. This involved an alleged failure by Countrywide to safeguard its clients’ funds, RICS claimed.

The second was that the firm’s conduct represented “a serious and prolonged disregard to professional obligations set out in RICS’ client money guidance document.”

Now a RICS statement says that the disciplinary panel which considered the charges heard from the RICS itself and from Countrywide, and it was agreed between all parties that a reprimand and fine of £100,000 “was an appropriate and proportionate sanction.”

Full written reasons for the panel’s decision and the respective submissions of the parties will be published later this week, but in the meantime RICS issued a statement from its director of regulation Luay Al-Khatib saying: 

“RICS’ regulation is key to delivering confidence in property and construction services. Consumers need to have trust in professionals, and when property agents do not hold their clients’ money securely it seriously erodes that trust. 

“Today’s hearing shows the importance of RICS’ robust and independent regulation within the property sector and sends a clear message to the sector that failing to observe appropriate standards is not acceptable and has consequences.

“I am pleased that Countrywide has engaged constructively with us and committed to improved controls to preserve the security of client money. We will work closely with them to ensure these are implemented.”

Earlier, Countrywide issued a statement saying: 

“Back in 2008 we started to accumulate many thousands of individual small amounts on client accounts in our lettings businesses, where funds over six years old could not be traced to source. Some would have been rightly Countrywide funds and others small amounts of landlord/tenant sums that could not be traced. It was agreed at the time to move these untraceable amounts to an office account and put in place an indemnity that, should ever a recipient be identified, the amount would be paid across. In reality less than 1% were ever traced after six years. Immediately we paid over the amount due and customers did not suffer any loss.

"After ten years of audits an issue was raised in 2018 that this may not be in accordance with RICS Rules. Countrywide repaid all of the funds that had been transferred from office to unnamed client accounts. Importantly nobody has been disadvantaged but we decided to resolve the RICS matter immediately through a full transfer.”