Property Transactions and Anti-Money Laundering Regulations
In the UK, property transactions are a common method used by criminals to launder money. Due to the high value and scale of the property market, large sums of illicit funds can be disguised as legitimate in a single transaction.
To combat this, anyone involved in buying or selling property must comply with Anti-Money Laundering (AML) regulations. Multiple parties are required to perform identity and source-of-funds checks—this includes us, your mortgage lender, and your solicitor.
To make the process smoother, we recommend keeping all your documentation and evidence in one place, ready to share with any party conducting these checks.
For further details, please refer to our Anti-Money Laundering Policy.
Please note it is a legal requirement that:
- We carry out these checks.
- You provide the necessary documentation.
- We report it, should you be unable to provide any of the documentation required.
Anti-Money Laundering Policy
This firm is required to comply fully with the Money Laundering Regulations 2017 (‘‘Regulations’’) and as such we are required by law to get satisfactory evidence of the identity of our clients and and/or any third parties involved in your matter. This information must be provided at the outset which means for vendors and landlords at the time the instructions are received to market and sell or rent your property and for purchasers and tenants at the time that your offer to buy or rent is accepted by the seller or landlord. If this information is not provided as agreed, your transaction may be delayed, or we may have to withdraw our services from the sale of the property.
For an individual person, we require to see two current forms of identification, one of which will include photographic evidence such as a current passport or photographic driving licence and the second form will include a document that provides a satisfactory proof of address such as a bank statement or utility bill which is no more than 3 months old. The estate agent involved in your transaction can discuss this issue with you in further detail if you do not have a current passport or photographic driving licence and we have to accept alternative forms of ID.
The requirements for corporate entities such as companies or partnerships are more complex and you will be required to provide documentation e.g. certificate of incorporation, articles of association etc that confirm whom the beneficial owner is of the firm or the person(s) with significant control over it. The beneficial owner of a company whether through direct or indirect ownership or control, including through bearer share holdings is someone who has more than 25% of the shares or voting rights in the company, or any person who exercises control over the management of the company. In the case of Trusts this might include full details of the Settlor and or the Beneficiaries.
Original documentation will be the required for verification purposes wherever possible but if copies are provided, they must be independently verified by a professional person such as a solicitor and accountant and the photocopy marked up accordingly. In all cases and in line with the ‘Regulations’, the firm will retain copies of your ID in either paper or electronic form up to a period of 5 years after the date we have ceased the business relationship. In addition, we also reserve the right to use the services of third parties including on-line credit check companies to carry out identity verification of any client. The firm may from time-to-time request further documentation beyond what was originally requested should we deem it appropriate to meet our obligations as regards to the “Regulations”.
For previous clients, it is important that the firm conducts a check to confirm that there has been no change in your circumstances such as a change of address or name or, in the case of a corporate entity there is a change of identity, structure or beneficial ownership. However, it is requested that the client notify the firm should there such a change and provide us with the relevant identification or evidence.
In addition to verification of the client the firm will have to verify the source of any funds that are being used for the property purchase or rental. Funds received on your behalf from a third party require the same levels of identification and verification checks as the customer themselves. For example, if you are paying for the property by way of a mortgage you might be required to provide written confirmation. If it is a “cash” purchase or rental proof of funds in the form of a bank statement might be requested. In addition to verification of the source of funds there are occasions when the firm must be satisfied as to the source of wealth of any client instructing us, and we may need to ask you for an explanation of that source.
This firm has a professional and legal duty to keep your affairs confidential. However, it is important to note that should the firm have any evidence or form a suspicion that a client is in any way concerned with money laundering or terrorist financing we are under a legal obligation as set out in the Proceeds of Crime Act 2002 to make a formal report to the National Crime Agency (NCA) who are responsible for collating all reports of potential money laundering. The firm is explicitly prohibited from notifying you of the fact that any such report has been made and because of such a report the firm might have to suspend work on your matter for a period, and/or even terminate the relationship. If this is the case, then we cannot legally notify you of this fact or the outcome of such a report.