Vendor's EA, ID and Money Laundering rules

red9876

Can anyone direct me to the actual specific rules on what a selling EA need under money laundering legislation (like a specific piece of legislation and a citation) with regard to proof of ID and address ?
I've had an offer accepted on my dream house with a nightmare of an online estate agent.

They insist they need to see documentation and can't accept the word of my solicitor. After arguing over my unwillingness to email or post such a large amount of personal data I sent the documents with my solicitors confirmation that it met their requirements. This has been "declined" by the selling EA who insist they have a specific format and the law won't allow them to accept anything else. But when I ask what law and where they get vague and insistent.

I can't be the only one who doesn't want to email enough information to steal my identity to a company I'd never heard of last month.:mad::mad::mad::mad:

Slithery

I don't believe that there is a specific rule. It's up to each individual EA/solicitor what they need to see to satisfy themselves.

red9876

So they can all just make it up as they go along ??? Ridiculous .:wall:

System

You are absolutely correct red9876!
They have no legal authority to demand it. The business relationship is between them and the vendor and not with you
You cannot get into trouble by not providing it.
Even the rules don't exactly say what they have to take. It just says they you need to know who you are which can be via your solicitor.

red9876

*paranoidandroid31978* this is exactly my concern. I'm setting myself up for identity theft because I have to trust an online agent.

It's so frustrating being held over a barrel by someone who won't tell me their legal basis for insisiting on something. Only that they won't proceed without it.

mrschaucer

Just get your solicitor to speak to the vendor's solicitor and let him give suitable assurances re identity and money laundering. Cut the idiot EA out of the chain - if your offer has been accepted you can just move forward with proper legal professionals surely.

System

Well you could always just wait until the sale has progressed far along and delay giving them the ID. That won't actually stop the sale going through. Wait until it's got into the hands of both solicitors then it's too late for the agents to do anything.
Stall and make excuses Legally they can't stop you buying the house and nor would they. They just are following a rule but don't cooperate and you'll be fine.

I had the same issue and I didn't give them my ID. It is a slightly different kettle of fish when you are selling your house. Technically they should be able to use a letter from a solicitor but they always reserve the right not to take on your property. The larger ones probably wouldn't but the smaller ones probably would with a letter from your solicitor.

red9876

mrschaucer -tried that, they said "we can't just accept someone telling us they've seen it" ��

jonnygee2

The business relationship is between them and the vendor not you.

http://www.legislation.gov.uk/uksi/2017/692/pdfs/uksi_20170692_en.pdf

Meaning of business relationship
4.—(1) For the purpose of these Regulations, “business relationship” means a business,
professional or commercial relationship between a relevant person and a customer, which—

(a) 2000 c.11.
(b) 2001 c.24.
(c) S.I. 2011/2742. The title of the instrument was amended by S.I. 2016/937.
(d) 2010 c.38.
(e) Section 415B was inserted by paragraph 41 of Schedule 9 to the Financial Services Act 2012 (c.21).
(f) 2006 c.46.
11
(a) arises out of the business of the relevant person, and
(b) is expected by the relevant person, at the time when contact is established, to have an
element of duration.
(2) A relationship where the relevant person is asked to form a company for its customer is to be
treated as a business relationship for the purpose of these Regulations, whether or not the
formation of the company is the only transaction carried out for that customer.
(3) For the purposes of these Regulations, an estate agent is to be treated as entering into a
business relationship with a purchaser (as well as with a seller), at the point when the purchaser’s
offer is accepted by the seller.

And then from the guidance for EAs

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/628696/Estate_Agency_Businesses_Guidance_.pdf

You must also show how you will:
● do customer due diligence checks on sellers and buyers and carry out ongoing
monitoring

So actually Estate Agents are very clearly and specifically obligate to mitigate risks of money laundering, both with the buyer and seller.

However, the guidance does not specify the 'format' of due diligence checks. It's about risk mitigation, and I think if you are an everyday UK based buyer, buying from a similar seller, and your solicitor has verified they are satisfied, then your EA is obviously being far too cautious in demanding further checks.

System

That regulation is "only" relevant to the estate agent it is not a regulation in law that applies to the buyer. There is no legal remedy if the buyer refuses. The estate agent can ask but the buyer can refuse.

Legally the estate agent has no powers to interfere with the transaction apart from withdrawing their services

There are no powers in UK law to demand ID from a buyer and further more there are no penalties for the buyer either. The regulations are applicable soley to the Estate Agent and not either the seller or the buyer.

In law if two private citizens wanted to buy and sell a house they can still do so with a bag of cash and no ID whatsoever. It's only when you use a solicitor and an estate agent that "they" have these regulations put upon them that can penalize them only.

With the case of solicitors it's more black and white, you are either their client or you're not and I believe to be a practicing solicitor you have to conform to rules laid down by the law society and therefore if you didn't take the "standard id" they'd possibly get disbarred by not taking your ID not to mention they'd probably be not compliant with their insurance which is a very big deal if you're a solicitor so I think you'd struggle to find a solicitor who would not ask for your ID.

jonnygee2

All that last bit covers that you highlighted is again telling the "Estate Agent" what he must do, it does not refer to the buyer in any way.

it actually says the word 'buyer'! Let me highlight it for you;

You must also show how you will:
● do customer due diligence checks on sellers and buyers and carry out ongoing monitoring

Legally the estate agent has no powers to interfere with the transaction.

They do actually, they could write up a SAR and have the transaction suspended and the funds frozen. In fact if they suspect money laundering they are legally obligated to do this.

That regulation is "only" relevant to the estate agent it is not a regulation in law that applies to the buyer. There is no legal remedy if the buyer refuses. The estate agent can ask but the buyer can refuse.

Sorry that's not how AML regulation works. What the regulation says is that a) certain businesses must take certain steps to prevent money laundering and that b) if they have good reason to suspect it is taking place they must report it to the relevant authorities (via a SAR).

Estate Agents are, very clearly, obligated to risk-manage the money laundering risk on both sides of the sale. The legislation is very specific that EA's responsibilities include both buyers and sellers.

However if both sides are already using UK based solicitors who are approving the transaction, this is obviously seen as more than enough risk mitigation. This EA is being way too cautious over their responsibilities, but it's simply wrong to say that they don't have any responsibilities or that they have no power to do anything if they suspect money laundering.