This article applies to both Estate Agents and Letting Agents.
Estate Agents are regulated by HMRC. A regulated business must comply with The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 as amended by The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (‘the Regulations’) require regulated business to comply with the Regulation.
It is important that estate agents understand and meet their obligations under the Regulations to protect themselves, their community and the UK. Any weakness in the controls the business uses can be exploited by criminals to use, coerce or control the business to move their funds. Often these funds come from drug dealing, people smuggling or modern slavery and cause significant harm to society, communities and the lives of individuals.
The range of services offered by an Estate Agent can include higher and lower risk activities, and it is important that businesses understand and properly appraise the risk presented by each customer, including the counterparty such as a tenant or purchaser of property.
HMRC expects estate agents to carefully assess and document the specific risks that you face and establish and keep up to date policies, controls and procedures to address these. These must be effective to help prevent money laundering or terrorist financing through the business.
The Form made available by Simply-Docs prompts the Agent to check the client’s documents to prove their name and address. A list of acceptable documents appears in the form. The Agent then assesses the level of risk and records this on the form.
This form is suitable for simple due diligence. Enhanced due diligence may need to be undertaken for high-risk individuals and transactions.
Estate Agents are urged to read the Regulations and guidance issued by HM Revenue and Customs if you are a regulated business to ensure that you are complying fully with the legislation. A template named Estate Agency Client Identification and Risk Assessment Form is available from Simply-Docs which is intended as a starting point to assist you in implementing the requirements set out in the Regulations and guidance. This is not a form which Landlord Advice UK provide.
HMRC has published a useful guide for Estate Agents to ensure they are compliant with the Regulations, this guidance should be read in conjunction with this article. This guidance was updated in October 2020 and can be found here.
Failure to comply with the Regulations can result in civil penalties or criminal prosecution. Senior managers and nominated officers can also be found personally liable for a breach of the Regulations. If you are unsure how to edit or adapt this template policy in accordance with the Regulations and guidance, professional advice should be sought. Landlord Advice UK offer advice on these matters.
This Estate Agency Client Identification and Risk Assessment Form is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.
The Form is available from Simply Docs which can be accessed here: https://simply-dcs.co.uk/Home.