Anti-money-laundering (AML) regulations are crucial in the property industry to prevent investment of illicit funds. AML measures help detect and prevent money laundering occurring through the purchase, sale or rental of property.
Nick Wooldridge of Stacks Property Search says, “Those who haven’t bought, sold or rented a property in the last five years may well be largely unaware of these AML checks. On the surface they don’t appear particularly onerous, but they can add significantly to the time the process takes. An advance understanding of what’s legally required, and why, will be helpful for anybody undertaking a property transaction.
“Estate agents, buying agents, solicitors and other professionals involved in property transactions are required to verify the identity of their clients, so buyers will be asked to provide documents such as passport, driving licence and utility bills as proof of identity and address. Buyers will also be asked to to provide information about the source of their funds for the property purchase to ensure that they’re legitimate and not the result of illegal activity.
“Buyers should be prepared with copies of utility bills, passport, driving licence and proof of funds for purchase. Be aware that the same checks may be made by numerous different professionals involved in the buying process.
“Of course, proof of funds may be coming from a variety of sources – for instance, mortgage finance, relatives, and different investment funds. You’ll need paperwork from the mortgage company and screen shots of bank accounts and other investment accounts.
“Buyers may be asked to provide historical proof of where the funds came from, whether that’s earnings, savings, inheritance or another source. If any monies are being gifted to the buyer, those providing the funds will also need to be ready to provide proof of identity and the source of the funds.”
Bill Spreckley of Stacks Property Search says, “Some estate agents won’t engage with buyers at all until they’ve gone through an AML check, others won’t put an offer forward. This can put a buyer well behind the curve when there are other competing buyers. Every agent does it slightly differently; some will require a buyer to present themselves in their office with their passport; others require a photocopy that’s countersigned by an approved professional.
“Buying from abroad can be particularly tricky. A buyer from Hong Kong was required to go into their local Savills office with their passport before they’d put an offer forward to the vendor.
“In some cases, enhanced due diligence may be required for high-risk transactions or when dealing with buyers from high-risk jurisdictions. This involves additional scrutiny and documentation.
“As much as these numerous checks can be irritating, they are 100% necessary, and there’s no way around the regulations. To navigate the process smoothly, it pays to be ahead of the game by gathering all the vital information at an early stage in your property search.
“We would also advise asking any professional you deal with during the buying process what their AML requirements are – so you can be prepared with multiple copies of all the paperwork to hand when it’s requested.”
Stacks Property Search, 01594 842880 / www.stacks.co.uk