The current Coronavirus lockdown may have temporarily led to many buyers and vendors putting their house moving plans on hold.
However once the restrictions are lifted, it is expected that conveyancers will face a sudden influx of work as estate agents work to clear the log jam of pending property sales.
In light of this, it is interesting to learn that a major legal regulator has approved plans to allow solicitors to use third-party managed accounts (TPMAs).
According to the Council for Licensed Conveyancers (CLC), the new accounting regulations could come into force later this year providing they receive approval from the Legal Services Board (LSB).
Ahead of this change, the specialist property regulator has published draft guidance for law firms on how to use TPMAs while continuing to safeguard client money.
TMPAs – which have long been approved for use by law firms regulated by the Solicitors Regulation Authority (SRA) – are client accounts operated by third parties – meaning client money is held offsite.
This has immediate benefits for law firms, including reduced insurance and security costs, as funds held in a TPMA are not legally defined as “client money” and are not held or received by a CLC practice, and so are “not subject to much of the Accounts Code”.
However, law firms must still act in the best interests of clients, ensuring that client money held in a TPMA is appropriate on a case-by-case basis.
Commenting on the advantages, Simon Blandy, Director of Regulatory Standards at the CLC, says: “TPMAs offer an alternative way for client funds to be handled with the potential to reduce risk.
“We believe that the rules and guidance we are proposing strike the right balance between the need for consumer protection and greater freedom for those we regulate to innovate, compete and grow.”
Could TPMAs save your law firm money? For help and advice, get in touch with our expert legal finance team.