Anti-Money Laundering & Letting Agents
From 10 January 2020, all letting agents who manage properties which, individually, yield an income of 10,000 Euros per month (or equivalent) or more, must now comply with regulations set out in the Fifth Money Laundering Directive.
All letting agents across the UK have 12 months to register, from May 2020, with HMRC if they meet the requirements. HMRC's online registration system for letting agents won't be operational until this time.
Customer due diligence (CDD) checks will need to be carried out on any new tenants and landlords on or from 10 January 2020. Also, if an existing tenancy is renewed after this date, letting agents will need to carry out appropriate checks at that point on both parties.
Any letting agent who carries out sales and is already registered with HMRC for AML supervision and fall within the scope of the regulation, will need to inform HMRC that they also carry out lettings.
Letting agents must take appropriate steps to identify and assess risks of money laundering and terrorist financing, establishing an up to date, written risk assessment and a written policy on how to manage the risk.
All businesses should appoint a nominated officer - Money Laundering Reporting Officer (MLRO) - who will be responsible for the letting agency complying with the Money Laundering Regulations.
All employees should be aware of the law too and business owners should provide regular training in how to recognise the deal with transactions that may be related to money laundering.
CDD must be carried out on both the tenant and landlord for any agency agreement with a monthly rent of 10,000 Euros (or equivalent amount) or more. This means identifying and verifying the customer, obtaining information on the nature of the business relationship and details of any beneficial owners. Carrying out CDD before establishing a business relationship should be done too.
If a business fails to comply with the Money Laundering Regulations, they may face civil penalties or criminal prosecution. This could result in unlimited fines and/or a prison term of up to two years.
Arla Propertymark has produced some comprehensive FAQs.
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Written by Deb Roberts
Source Estates IT Ltd
