Property letting agents made exempt from Money Laundering Regulations 2007

Property letting agents have been made exempt from the Money Laundering Regulations 2007 after discussions between representatives of the Government and the Royal Institute of Chartered Surveyors (RICS).

The industry body negotiated the agreement with the Treasury after EU legislation had looked set to bring letting agents and those in charge of property management into the Regulated Sector.

RICS officials argued that such a move would mean agents would become subject to unnecessary legal checks and registration, despite the fact that they will not necessarily ever be involved in handling clients' money.

As a result, it was able to successfully argue that the regulations have "very little relevance" to letting agent activity, prompting the exemption from the government.

Director of regulation for RICS Steven Gould said, "RICS is keen to see the residential market regulated properly, but it is also vigilant against over-regulation. Thankfully, on this occasion the Government has been clear-sighted."

However, letting agents which are also estate agents do come under the Money Laundering Regulations 2007 and in July 2009, the Office of Fair Trading (OFT) commenced registration for these firms.

The regulations cover anyone involved in negotiating a sale and if a rental has a value on the open market (i.e. it can be resold), this may be classed as an estate agency service needing to be registered with the OFT.

All estate agents operating in the UK, including firms and sole practitioners, residential and commercial agents, are required to register with OFT. If a firm is regulated by the FSA under the Financial Services and Markets Act, the FSA also will be the supervisory authority under the Money Laundering Regulations 2007.
Registration is compulsory for all those in the Regulated Sector with failure to register possibly leading to a fine or up to two years in prison.

RICS applied to become a designated professional body under the Money Laundering Regulations 2007, however the wording of the EU directive from which the regulations are derived only allows regulation by professional bodies for certain categories. Estate agents are not one of the categories which can be regulated by a professional body.

Compliance with Money Laundering Regulations 2007
Achieving compliance with the various aspects of UK money laundering law can be a major task for estate agents and other businesses in the Regulated Sector and is only further complicated by the potential for future amendments to the legislation and the processes through which a firm is supervised. This requires knowledge of the practical working of these Regulations and support in introducing appropriate internal controls.

The services provided by ML Solutions 4U can help firms of any size throughout the Regulated Sector achieve compliance through personalised anti-money laundering training packages. With a choice between seminars, in-house workshops and digital training technology, our expertise in this field can be shaped to meet the specific needs of any MLRO. Also available from ML Solutions4U is access to a dedicated anti-money laundering compliance Helpline, assistance in preparing practical compliance guidance and in establishing the internal systems and controls required under the Regulations.

For more information about how our services can support your firm in meeting its obligations under the Money Laundering Regulations 2007, please complete our enquiry form, or telephone an advisor on 0845 872 7361.

Money Laundering Information » Money Laundering Regulations 2007 and Letting Agents