Landlord Law

4.2.1 Client's money

4. Property Management
4.2 Financial management
4.2.1 Client’s money
Money held, deposits or rent collected for and on behalf of an applicant, tenant or ex-tenant, client or ex-client landlord is considered as client money.

You should keep adequate accounts and records to show all dealings with client money.  Client money should be held separately from landlord or agent money and you must be able to account immediately for all money held on behalf of a client or a tenant.

Clients’ money should only be withdrawn from an account:
• where it is properly required for payment to, or on behalf of, the person entitled to it
• when meeting agreed costs
• for payment of any remuneration or reimbursement of expenses in carrying out services to which the landlord or agent is entitled, with the written agreement of the client
• in the exercise of any lien to which the landlord or agent is entitled
• for transfer to another client account; and
• when non-client money was used to open or maintain the account.

Otherwise, no deductions should be made from clients’ money without that client’s prior written permission.  You should give sufficient notice prior to the deduction so they are able to object to it.

You should advise clients or tenants in writing that you are not liable to repay lost money through bank failure.

The proper care and protection of other people’s money is very important – whether they be a tenant or an applicant for a tenancy or a landlord if you are a letting agent.


A ‘lien’ only arises in certain circumstances and is where someone is entitled to retain a persons goods, paperwork etc until his bill is paid.

Liens are availbale to hotels, solicitors and agents but not to landlords.