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How do money laundering regulations affect me?

By Fi Walkley

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In this feature, we look at what money laundering regulations exist in the UK and how they affect landlords, tenants, sellers and buyers alike.

Estate agents are subject to the Money Laundering Regulations 2007 and the Proceeds of Crime Act 2002, and are obliged by law to comply. Whether you are looking to buy, sell, let or rent a property, you will find that your estate agent will ask you for proof of identity and proof of address. So, if you have been asked for ID, there’s no need for concern.

money laundering regulations

What is money laundering?

Money laundering is where criminally obtained money or assets are exchanged for ‘clean’ money, i.e. the process of taking the proceeds of criminal activity and making them appear legal. Property transactions are a known target for this illegal activity, so all relevant businesses must have appropriate anti-money laundering (AML) systems in place. This is required under the Money Laundering Regulations 2007 and the Proceeds of Crime Act 2002.

What does this mean if I am a landlord, a seller or a buyer?

For landlords, sellers and buyers, this means that your estate agent is legally obliged to obtain proof of your identity and proof of your address.

Estate agents will also require sight of all original documents or alternatively, certified copies. Where providing original identity documents they will need to be seen in the presence of the document holder. For the avoidance of doubt, a certified copy should be certified by an individual from a recognisable profession (i.e. doctor, teacher, solicitor, bank manager, accountant or public notary), with the copy containing the details of the individual certifying it and their contact details.

What does this mean if I am a tenant?

Tenants must also provide the same proof of identity and proof of address, which is a standard part of the referencing process. Where the tenant is a group, each individual adult occupant will be required to provide identity documents. Where applicable, a tenant will also have to prove their source of funds, especially any cash payments or funds transfers from overseas. It is important to note too, that in order to complete a Right to Rent check prior to granting a tenancy, the provided tenant ID documents must be the originals seen in person, in the presence of the document holder.

What are acceptable identity documents?

Below is a list of acceptable identity documents. You will be required to provide one document from List A and one recent document from List B, dated within the past three months. Depending on individual circumstances, estate agents may require further/other documentation.

money laundering regulations

*EEA countries are Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden & United Kingdom

For more details on the legally required ID checks or any other questions, speak to one of our friendly expert advisers on 0800 369 8667.

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