Agents warned that new anti-money laundering requirements drawing nearer

Agents are reminded that the clock is ticking towards a new anti-money laundering regime that will affect both sales and lettings.

It is set to ensure that both lettings and sales agents will have to make anti-money laundering checks on sellers and buyers, and on tenants and landlords, from the end of June.

The checks, including on where both sides of transactions get their cash together with ID checks, are being brought in under European legislation.

It has not been clarified whether the new regime will have a retrospective element, whereby checks will also have to be made on existing landlords and tenants.

Concerns are also being raised as to how agents will deal with the extra costs involved in making the checks.

Compliance expert Mike Day, who runs courses for agents on anti-money laundering, said: “The 4th Money Laundering Directive is due to become law from June 26.

“Whilst we await the final detail, it is odds on to widen the customer due diligence requirements on agents to include both sellers and buyers and lettings with landlords and tenants.

“Agents are required to ensure that all staff are trained and aware of their obligations.”

Meanwhile, sales agents continue to be on their guard, as a new report warns that corrupt money is financing the purchases of expensive new apartments in London.

According to the report, Faulty Towers, by London-based anti-corruption Transparency International, up to 80% of properties in luxury developments are being snapped up by overseas investors, with 40% sold to individuals from high corruption risk jurisdictions, or to companies based in secrecy havens.

Its findings are based on an analysis of Land Registry data for 14 landmark developments consisting of 2,066 future homes.

Transparency International warns that off-plan purchases are inherently riskier in terms of money laundering, but the risks rise even more when the properties are expensive.

Its report says that this model of development has led to an over-supply of high-end new properties.

The report continues: “Symptom of this oversupply is the current slowdown in luxury property purchases; this provides strong incentives for sellers to push through deals with less rigorous money laundering checks being applied to the buyers.

“To make matters worse, there are concerns with the quality of due diligence done by estate agents and conveyancers on prospective customers for all kinds of housing, as dramatically illustrated by the RICS expelling one of their members following the documentary From Russia with Cash.”


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Written by: Houseladder