Regulatory Requirements For Property Transactions
Clear regulatory responsibilities are placed on all UK estate agents. We’ve put together guidance on the ‘what’ and ‘why’ to help you understand what this means for you.
Regulatory Requirements
Austin Hawk take the regulatory responsibilities placed on all UK estate agents very seriously. As estate agents, we are required to comply with several laws designed to prevent illicit funds passing through the UK. These include the Proceeds of Crime Act 2002, the Criminal Finances Act 2017, the Terrorism Act 2006 and the Money Laundering Regulations 2017. If we did not complete the necessary KYC (Know Your Customer) checks, we would place you and ourselves at risk of prosecution and undermine our corporate responsibilities.
Property transactions are seen by the UK Government and crime agencies as posing a particularly significant money laundering threat. As such, the Money Laundering Regulations 2017 require estate agents to understand and verify exactly who their customers are and have evidence that they have completed KYC checks. Should an estate agent become suspicious of a prospective client or existing client’s activities, it must report this to National Crime Agency.
We’ve put together a list of Frequently Asked Questions to help provide you with more guidance on the ‘what’ and ‘why’ of these regulatory requirements.
Why do Austin Hawk ask their clients to provide information about themselves or the businesses they represent?
Estate agents in the UK are required to comply with, amongst other things, the Proceeds of Crime Act 2002, the Criminal Finances Act 2017, the Terrorism Act 2006 and the Money Laundering Regulations 2017. These place various obligations upon estate agents, with one of the key requirements being to undertake KYC checks to verify the identities of their clients. For corporate clients these checks will need to be extended to enable us to identify the Ultimate Beneficial Owner and/or those who have ultimate executive control.
What information will you request and what checks will you need to do?
For parties representing themselves and where you are representing yourself and:
- Wish to sell a property that you directly or jointly own;
- Are considering buying a property from one of our selling clients;
- Are seeking advice from us on a particular purchase;
We will ask you to provide us with documentation confirming your identity and your primary residential address.
Where you wish to buy a property from one of our clients, or where you want us to advise you on a particular purchase, we will also need information clarifying the origin of the funds being used to complete the transaction.
If you are currently not a resident in the UK we may require further information from you.
If you are using Corporate Vehicles and Trust structures, Not for Profit Organisations and Investment Funds. Then the extent of information and checks undertaken on corporates, trusts, not for profit organisations and investment funds depends on the perceived money laundering risks associated with a given structure, jurisdictions used, or nature of business activity underpinning the entity.
For all cases, irrespective of the structure used, you will be required to provide documentation to enable us to evidence the identity of the individuals who ultimately benefit, or will benefit, from owning the asset.
Can you rely on KYC information provided to my other professional advisers?
How will you use my information?
Your information will be used for the sole purpose of completing the necessary KYC checks in order to meet our legal obligations.
In the event of an inspection/investigation by the regulator or law enforcement authorities your information will only be shared if requested and to the extent we are obliged to provide it.
Should you wish for us to provide the information that we hold about you to another third party acting on your behalf, or on the other side of a transaction, we would be pleased to do so following a written request.
Who regulates estate agents for the purposes of the money laundering regulations 2017?
Do I have to answer these questions?
What happens if I do not answer the questions / What if I do not give you the information / documentation?
Do other advisers and estate agents request this information?
Do you ask all of your clients kyc- related questions?
You already asked these same questions last year. Why are you asking them again?
Where can I learn more about the requirements?
What can I do to help with this process?
If you are an individual the process should be straightforward. We will be able to confirm the documentation that we require to enable us to complete our KYC checks quickly.
If you are using a corporate or trust structure, a not-for-profit organisation or an investment fund, we have a dedicated Client Onboarding Team. We can work with you to identify the information we require from you, for us to meet the regulatory obligations as an estate agent and private limited company registered in England and Wales.
