Bank Account for Residents' Management Company

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    A client account tells everyone that the monies do not belong to the RMC, they are service charge monies which can only be used for the purpose set out in the lease. Otherwise if you have another account at the same bank, the bank may decide to offset the service charge monies against your debt.


      The RICS code of practice explains to everyone how a property should be managed, it is not just for professional agents.


        Ring fenced means protected from the creditors of the company.


          Originally posted by eagle2 View Post

          I think that the "designated client account" is the more appropriate account to hold at Lloyds, the treasurers' account is intended for charities and the like.
          Lloyds has a separate category for charities. I am merely passing on what we were advised as self-managed flat companies. It is not a client account as we are not the agent. If you look at their website it is clearly explained. Ground rent does not have to be kept separately at present as long it can be identified (see Tech 03/11). Since there is no trade there is no issue of loss. In the event of fraud we are covered by D&O insurance.


            If you are holding monies which do not belong to you, you should hold them in a designated client account and you should inform the bank so that the monies are ringfenced as explained to you previously. You cannot say that there is no issue of loss, many RMCs suffer losses, you only need to read the FTT decisions to see examples of expenditure which has been disallowed.


              Tech 03/11 paragraphs 8 to 14 appendix A deal with the banking arrangements and paragraph 11 states that service charge monies should be kept separately and the bank account should have "client" in its title. It also refers to the RICS code of practice.

              Para 6.2 of the code of practice states "you must open one or more client bank accounts" … on opening a bank account, you should give written notice to and seek written confirmation from the bank … that (a) all money standing to the credit of that account is client money (b) the bank … is not entitled to combine the account with any other account or to exercise any right of set off or counter-claim … "

              Self managed blocks should obtain a statement from their bank that the funds are ring-fenced


                Well, this is fun.

                Metrobank seem not to want to open an account (but haven't bothered to tell me why).

                HSBC say their client account facilities are only for "regulated professionals" and they're unable to help.

                Lloyd's want to know the full details of every shareholder (ie leaseholder) - and I can't proceed because there are two leaseholders whose details I don't yet have.

                Santander insist that they're all UK residents (which they aren't).

                Surely it's not supposed to be this difficult!

                I've got a face to face meeting with an advisor at Barclays this Thursday, but I don't know if he will throw some other spanners into the works.

                Alternatively can I get around this by setting up a "dummy" company (I can form a Ltd co for 99p) where I'm the only shareholder [as opposed to the RMC which has 11 different shareholders?], and then open a bank account for that dummy company (easy because I'm the only shareholder) - and then bolt the required client account onto that account? Sounds messy.


                  In theory you could if the RMC appointed the new company to hold the funds and you disclosed to sll leaseholders the details of the account. I wouldn't be happy though as a leaseholder if service charge funds were under the control of one leaseholder.

                  I know that it is not easy to open a client bank account for a RMC. Have you tried Barclays or Lloyds?


                    See above - Lloyd's asking for full details of every leaseholder (which I don't have). Meeting Barclays on Thursday so I'm unsure at this stage what hurdles they might put in the way.

                    I've now set up a limited company as previously mentioned. Whether or not it'll be useful remains to be seen.

                    This is a nightmare. Something that should be quite simple is turning into a major headache. Banking shouldn't be like this in 2019.
                    Last edited by bigalxyz; 15-07-2019, 17:31 PM. Reason: Hit save too soon


                      Apologies I missed your comments about Lloyds. It is slightly easier if you already have an account with the bank.


                        All done! Barclays came good in the end (although it took quite a while). Now to get the previous manager to send the £££ across to the new client account...

                        Thank you all for your comments & advice.




                          I hope you don't mind me getting in touch. Can I ask whether Barclays allowed you to open one with all leaseholders? We have a building of 5 people and all are directors in the management company. Do they all have to be named on the account? Can you just have one or two people who have control of the account.

                          Thanks in advance


                            Adavies I'm not sure for Barclays, but NatWest needed all details of RTM co-directors. For Metrobank, they only needed the details who would be signatories on the account (two).


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