Agents escape expulsion after disciplinary action

A firm of estate agents where £160,000 of clients’ money was misappropriated escaped both a fine and expulsion from the RICS because it worked so hard and promptly to put things right.

The RICS disciplinary panel said that Alex Dines & Co, of Manchester, had acted in a cavalier manner, but it also spared the firm local newspaper publicity. The case was heard in January and the result of the hearing published on the RICS website, but other press media only learnt of it this week after a tip-off.

At the hearing, Alex Dines & Co admitted two separate charges of failing to preserve the security of clients’ money entrusted to it, and failing to pay the RICS a £300 fine for the late delivery of its annual return. The panel found the charges proved.

The panel heard that there had been financial difficulties during 2008 and 2009. There had been a lack of supervision by the managing director and procedures in one of the firm’s offices were inadequate to protect clients’ money.

A business partner had transferred around £80,000 to a company connected with the firm, and one or more members of staff had misappropriated a further £80,000.

Because of the lack of appropriate administrative procedures, it was not possible for the firm to explain when the sums were removed by any member of staff or state which member of staff was responsible.

The panel said the amount of money that had gone missing was “substantial” and that it would normally expel the firm. However, the panel agreed that the firm had done much in the way of ‘substantial’ mitigation.

It had fully co-operated with the RICS; there had been no loss to clients, with prompt reimbursement; security and accounting had been improved; and Alex Dines had said it would welcome further visits by RICS auditors.

The panel decided that the firm could retain its RICS registration but imposed conditions. These include visits by auditors over the next three years and an order that the firm provides internal management accounts to the RICS auditor every three months for a period of three years. The firm was also ordered to pay the £4,096 costs of the hearing within two years. It was not, however, fined.

The firm requested that the decision of the panel not be advertised in a local newspaper as it would be detrimental to its business. The panel agreed, saying it was not necessary to protect the public on this occasion by advertising the decision in a local newspaper.

However, this week the case was covered in the Manchester press.

On its website, the firm says it is also a member of the NAEA.