How a property managing agent protects your money
Photo by Dami Akinbode on Unsplash
Many people have been affected by the recent demise of Initiative Property Management and may have lost thousands of pounds of service charge funds. You could be one of them.
At Property Black Box we do it better, we protect your service charge funds in designated client trust accounts so that your money is better protected, by default. It’s the right thing to do.
Read on to understand what designated client trust accounts are, all the other things Property Black Box does to protect your money, and some questions you can ask your current property managing agent about how your hard earned money is currently being protected.
What is a client trust account?
Every property we manage at Property Black Box has it’s money automatically stored in separate, dedicated client trust accounts with NatWest. It’s our default mode of operation.
Money held in trust refers to funds that are legally held by a designated trustee on behalf of another party, typically to ensure the protection and security of those funds.
In the context of property management, client money is often held in trust, safeguarded from being used for any other purpose than what is explicitly intended. For example, service charge funds collected from leaseholders are kept in a designated client trust account.
Protecting your money at Property Black Box
This setup provides several benefits
It ensures that client funds are distinct from the company's operational funds, minimising the risk of misuse or misappropriation.
It offers transparency, allowing clients to have visibility into their funds and how they are managed.
If Property Black Box were to collapse, your money would be safe.
Holding money in trust should give you confidence that your financial contributions are securely protected, promoting trust and a sense of security between you and your property managing agent.
Wait, my funds aren’t protected already?
You would think so, but it’s certainly not the default. It takes time and effort to create client trust accounts, a lot of businesses won’t go to this additional effort and your money might be at risk.
Does your current property managing agent hold your funds in a designated client trust account?
Insurance
As a professional business, Property Black Box maintains comprehensive insurance coverage:
Professional indemnity insurance safeguards us and our clients in case of any errors or omissions in our services, and against any fraudulent activities that might impact our client’s funds.
Public liability insurance provides protection in case of any accidents or injuries that might occur on your property.
This combination of insurances is essential to ensure that clients' interests are protected, they offer the peace of mind and reassurance that your financial assets are in safe hands.
Does your current property managing agent have the right insurances in place to protect your money and your interests?
Anti-money laundering supervision
At Property Black Box, we have taken additional steps to ensure the utmost security for our clients' funds by securing supervision from HMRC for anti-money laundering measures.
This ensures that all financial transactions are closely monitored and scrutinised, reducing the risk of any fraudulent or illicit activities.
The benefit of this supervision for our customers is the assurance that their money is being handled with the highest level of integrity and in full compliance with regulatory standards.
It provides an added layer of protection and peace of mind, reaffirming our commitment to maintaining the highest ethical standards in financial management.
Does your current property managing agent have anti-money laundering supervision in place from HMRC?
Our Controls
The way a property managing agent operates helps to ensure the safety and protection of your service charge funds.
Here’s just some of the things we do at Property Black Box to protect your money:
We restrict access to our bank accounts and sensitive financial information to only those that need it.
We use multi-factor authentication by default as an additional layer of security against unauthorised access to all of our systems.
We ensure that only authorised personnel handle financial matters.
We partner with a leading UK bank (Natwest), that uses the latest security technology when setting up new payees to minimise the risk of fraudulent transactions.
We use multiple signatories on bank accounts as an additional safeguard to prevent any unauthorised transactions or misuse of your funds.
Our Finance Team comprises chartered accountants receiving regular training, ensuring that we exceed industry standards to provide you with best-in-class protection for your funds.
It’s the combination of these measures that collectively contribute to the overall security of our clients' money; fostering trust and confidence in our financial management practices.
Does your current managing agent have the right controls in place to protect your money?
Financial Management
Property Black Box incorporates regular bank reconciliations and monthly accounting procedures to maintain up-to-date and accurate information for each property under our management.
By diligently reconciling accounts, we ensure that all financial transactions are recorded and accounted for as and when they happen, minimising the risk of errors and discrepancies.
Many property managing agents only do this once per year, making the information out of date and very difficult to understand what’s been spent, how much money is left and whether any fraudulent activity might be occurring.
Our method allows us to have a comprehensive understanding and up-to-date financial status of your site, facilitating informed decision making, effective financial planning and control.
How often does your property managing agent reconcile your bank account transactions? Can they give you accurate information about the state of your finances right now, or do you have to wait until the end of the financial year?
Next Steps
Not all managing agents are created equal.
At Property Black Box we do everything we can to protect your money and your interests. Ask your current property managing agent the following questions so that you understand your position:
Are they holding your funds in a designated client trust account?
Which bank is your money held in?
What insurances do they have in place to protect your money and your interests?
Do they have anti-money laundering supervision in place from an organisation such as HMRC?
What controls do they have in place to protect funds and fraudulent activity?
How often are your bank accounts reconciled? Can they give you accurate information about the state of your finances right now, or do you have to wait until the end of the year?
If you are not happy with any of the answers, change your managing agent, we’d love to help you at Property Black Box.
If you’ve been affected by the collapse of Initiative Property Management
Please get in touch.
By instructing Property Black Box as your new property managing agent, we can help you move forwards and get back to just enjoying your home again.
We protect your funds by default - it’s the right thing to do.
Contact Us - we’ll help you every step of the way.
Read more about the IPM collapse here:
Police investigate property management firm as 'accounts are frozen'
Property management firm 'investigated for fraud' by crime unit
Property management firm's disappearance 'leaving elderly people housebound'
Police investigate agency after receiving reports of missing money - Property Industry Eye
Summary
The recent collapse of Initiative Property Management is a reminder to us all to not be complacent.
Property Black Box is a local property managing agent in Bournemouth, we care about doing the right thing and doing things right. It was set up as a result for working with the one of the largest property managing agents in the UK for over a decade, and wanting to do things better.
We use local suppliers and contractors to support Bournemouth and the surrounding areas.
We protect your money by default.
We do everything we can so that you can just enjoy your home and not worry about how your property is being managed, you know you’re in safe hands with Property Black Box.
Property Black Box is an accounting-led property managing agent. Financial management is the forefront of what we do, we protect your money by default and we also have also a wealth of property managing experience. This is a unique combination of skills that is quite rare in the property management industry.
Multiple financial management activities contribute to ensuring the protection of client funds. It’s complex and time consuming, which is why you should choose a property managing agent you can trust.
We hope you choose Property Black Box to be your next property managing agent.
If you like what you hear, or your want to learn more, please get in touch.