Property moves with the timesThe introduction of the 2017 Money Laundering Regulations saw the implementation of a scrupulous system, which demands a closer inspection of all trade activity conveyed by estate agents.
The Directive confirms various key changes to existing legislation, but highlights the need to examine Buyers in greater detail, whereas before the focus fell upon sellers only. The changes have been introduced to stifle risks posed from activity such as terrorism, money laundering and Politically Exposed Person’s. Estate Agents will now be required to administer the same checks on buyers, whereas previously, only the seller was scrutinised. Estate Agents may be held personally liable if necessary steps are not taken to prevent such activities.
HMRC will now be governing the responsibility, having inherited the process from the OFT. HMRC have made the registration of any Estate Agency mandatory with themselves, which must be done prior to carrying out any business. A risk assessment must be performed by Senior Managers on all areas of the respective Estate Agency in order to identify areas where the business may be vulnerable to illegal activity. The assessment is required to be reviewed on an ongoing basis in order to manage said risks and apply an appropriate level of investigation to each transaction. Senior Managers are therefore required to implement an effective system to action an ongoing appraisal. There is also guidance within the toolkit that provides a framework for Senior Managers to train colleagues and new employees.
Currently, the renewed regulations focus solely on the sale of property. However, from January 2020 the rental market will also be under surveillance based on the same principles, whereby landlords and tenants will both be subjected to stringent checks to intercept illegal activity. To begin, this will be introduced for lettings valued at £10,000+ per month, with the intention of widening the net later on.
LEM Verify (in collaboration with Harold Benjamin) is nominated for various 2019 Legal Week Innovation Awards