A guide to AML checks for estate agents
Buying and selling property is one of the most common methods of money laundering, due to high transaction values.
That’s why it’s essential for estate and letting agents understand their responsibilities when it comes to anti-money laundering (AML) compliance.
Mark Hayward, the chief policy advisor at Propertymark, says: “Property is often seen as a gateway to money laundering and it’s essential that estate agents are aware of their duty in carrying out the right AML checks and reporting any suspicious activity.”
As a result, all agents must comply with the HMRC regulation on money laundering, with the risk of fines or prosecution for those who don’t.
What AML checks do estate agents need to do?
The government regularly updates this money-laundering guidance document for estate agents.
It lists the responsibilities if you’re an estate agency owner or senior manager. As well as what the business should do in case there’s exposure to fraud or money laundering. Here are some of the main AML checks that are required for estate agents:
- Registering with HMRC. If your business carries out any work defined as estate agent activity in accordance with section 1 of the Estate Agents Act 1979, you must register with HMRC under the Money Laundering Regulations. This also applies to letting agents who meet the definition of letting agency activity and the rent threshold of 10,000 euros or more for at least one month.
- Proof of identity. Do estate agents need proof of identity? The answer is always yes, because estate agents are required to apply an appropriate level of investigation to check that the customer is who they say they are. This means obtaining their name, a photograph on an official document which confirms their identity and their address or date of birth – for example, a passport or driving licence plus utility bill or bank statement.
- Staff training. Businesses should take appropriate measures to make their staff aware of the law relating to money laundering and their responsibilities, including reporting any suspicious activity to the nominated officer.
- Creating a Policy Statement. This document should include your anti-money laundering policy, controls and your procedures to prevent money laundering. It must outline who’s responsible for managing the exposure to the risk of money laundering and highlight your approach to training employees to make sure they’re aware of their responsibilities around AML checks.
- Keeping records. As with so many aspects of an estate agency business, the regulations state that you must keep comprehensive records of AML checks and activity, including evidence of customer due diligence checks, customer contracts and proof of sale. Records must be kept for five years and stored in a secure location.
- Proof of funds. Under the Property Ombudsman Code of Practice, it is the responsibility of estate agents to check proof of funds. For cash buyers, this means obtaining a bank statement showing that the purchaser has the required amount of money. For those buying with a mortgage, estate agent proof of funds will usually come in the form of a mortgage in principle.
Carry out anti-money laundering (AML) compliance checks in Alto
Our latest partnership with trusted provider SmartSearch makes carrying out AML checks for estate agents quick, easy and reliable. Plus, you can do this without leaving Alto and in half the usual steps.
With our new integration you’ll benefit from:
- Guaranteed AML compliance
- Protection against fraud and money laundering
- Access to SmartSearch’s state-of-the-art customer verification platform
- Fast results and comprehensive checks in seconds
- Paperless documentation and processes
- Easy-to-use functionality designed in partnership with agents
Want to find out more?
To discover more time-saving benefits of our new AML integration, visit Alto Agenda. You’ll also be able to keep up with all the latest features, functionality and partnerships as they’re released.
Alternatively, if you’re new to Alto and interested in AML, book a free, no-obligation demo today.