Handling Clients Moneys
|Circular No. 01-11 (CR)
In the course of their business as estate agents, practitioners may sometimes find that they have to receive or hold moneys on behalf of their clients. For example, they may receive a sum as from a prospective purchaser/tenant for transfer to the owner of the property as initial deposit once an agreement is reached.
According to section 43 of the Estate Agents Ordinance and section 12 of the Practice Regulation, such moneys received from the client must be immediately acknowledged by receipt. The practitioner must deposit all moneys received or held on behalf of a client in a trust account with a bank. A practitioner who is an employee of an estate agent must hand over the moneys thus received to his employer at once, or deposit them in a trust account maintained by the estate agent.
Estate agents are liable to repay to their clients moneys received or held on behalf of their clients. For example, if the parties could not reach an agreement, a practitioner must pay back to the prospective purchaser/tenant the sum paid to him and intended as the initial deposit. Unless with the client's instructions, a practitioner must not withdraw moneys from a trust account, nor may he deduct or withhold part or all of such moneys to set off any commission or other expenses.
The management of estate agency companies and their branches must make sure that the abovementioned legislation is well understood and followed by their staff.