Client’s account. What is it?
Many time, people take for granted the client’s money. It’s very crucial for an estate agent to hold your money in his “client’s account”. It is a temporary stop before the money is transferred to the other party – buyer to seller or tenant to landlord. The client’s account is separate from the firm’s account. In estate agency practice, there is a special standard just on client’s account, i.e. Standard 9 of Malaysian Estate Agency Standard, 2014 and under PART VIII of the Valuers, Appraisers, Estate Agents and Property Managers Rules, 1986. It is so important that during yearly renewal of Authority to Practise, this Client’s Account is to pass audit and adequate insurance be purchased to cover its risks. The more the amount of money in client’s account, the higher the insurance. Therefore, the more is the premium that the agency firm has to pay!
In Malaysia, only two professions have to maintain client’s account. One is the Estate Agency Firms and the other is the Legal Firms. Other profession like Doctors, Engineers or Architects, they charge a fee for a professional jobs done or consultation. They do not hold money in transmission/transition. You pay them a fee for their consultation/job done. Probably professions which deals with money – bankers and accountants, due to reasons of money transaction they hold money for their clients/stakeholders in transmission, manage a client’s account. Outside of that, in unique situation where the core business is not accounting, finance or banking, having client’s account is rare. Law firm or agency firm hold on to client’s money because they are entrusted to see through the whole process. This process sometimes can take up to 6 months or even a year!
Tomorrow we will touch on client’s account in the context of estate agency practice.