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Understanding Anti Money Laundering requirements of lenders and solicitors

I’m selling a property following grant of probate. Should be a simple transaction. Buyer number one struggled to provide his solicitor or bank with adequate proof funds at the point of exchange. It was never clear which was not satisfied (suspect that having satisfied his solicitor’s requirements, he then failed to do the same for the lender and they pulled the mortgage offer). Some funds were being provided by a brother and were held in an Indian bank account, which clearly had a bearing.

Buyer number two is a very similar story. Willing buyer, willing seller but, again, at point of exchange, the solicitor has refused to continue with the transaction. The (Sharia) mortgage was approved and I’m assured that the deposit was from savings and readily evidenced. Tipping off rules prevent anyone telling me what the root cause of the deal collapsing is.

How do I avoid the same thing happening a third time and why did it get to the point of exchange before the AML requirements were being checked, whether by the lender or the solicitor?

All contributions welcomed.
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Comments

  • anselld
    anselld Posts: 8,497 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Get your agent to do AML checks on the buyer at the point of offer/acceptance. (As they are required to do)
  • Exactly what he was supposed to have done following the first deal falling apart but would that extend beyond the usual proof of ID and address? Would their checks extend to proof of funding? Are agents normally up to speed on AML and do I give him one last chance to redeem himself or do I start from scratch.....I know only I can answer last two questions.
  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    edited 8 February 2019 am28 8:24AM
    Graham17 wrote: »
    why did it get to the point of exchange before the AML requirements were being checked
    Because (as far as the solicitor is concerned anyway) there's no need for them to do the checks until funds are sent to them, and they need to check where the funds have actually come from (as opposed to where the purchaser says they plan to get the money from). Doing an advance check would be duplicating work, even if it gives everyone an element of reassurance.

    For the estate agent checks, buyers might have shown a bank balance or a mortgage acceptance in principle just to progress matters, but either change their mind or have never intended to use those methods. And we've seen other threads here where purchasers have (for sometimes good reasons...) changed their plans during the course of a transaction.

    And there are no standardised policies about AML checks, so the EA, lender, and solicitor may all take a different view about what's acceptable.

    I'm not sure of the statistics but would have thought it's pretty rare for purchasers to pull out due to AML problems, so think you've just been very unlucky here.
  • anselld wrote: »
    Get your agent to do AML checks on the buyer at the point of offer/acceptance. (As they are required to do)

    Suggest you read some of the threads on this board posted by would-be buyers when EAs do that - it doesn't go down well, with the politest response being "speak to my solicitor", and the most common being an invitation to go forth and multiply.

    Suspect the OP's just been unlucky, but maybe the demographic associated with overseas bank accounts and/or sharia mortgages will always make AML/KYC queries less straightforward...
  • MarcoM
    MarcoM Posts: 802 Forumite
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    edited 13 February 2019 pm28 9:59PM
    this anti money laundering thing is a joke. judging by the news it does not stop dirty money coming into the uk yet it puts innocent people through all sorts of issues when trying to transact like the op.
    shouldn't law enforcement be able to weed out criminals rather than passing the book on solicitors?
  • anselld
    anselld Posts: 8,497 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    ReadingTim wrote: »
    Suggest you read some of the threads on this board posted by would-be buyers when EAs do that - it doesn't go down well, with the politest response being "speak to my solicitor", and the most common being an invitation to go forth and multiply.

    I am aware that some take that view, however the government guidance is clear that the EA must carry out due diligence on both buyer and seller in the transaction...
    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/628696/Estate_Agency_Businesses_Guidance_.pdf
    Para 4.7
  • anselld wrote: »
    I am aware that some take that view, however the government guidance is clear that the EA must carry out due diligence on both buyer and seller in the transaction...
    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/628696/Estate_Agency_Businesses_Guidance_.pdf
    Para 4.7

    I guess it's up to you as to whether the warm glow of complying with government guidance compensates for the buyers you alienate and transactions you prevent from taking place.
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    ReadingTim wrote: »
    I guess it's up to you as to whether the warm glow of complying with government guidance compensates for the buyers you alienate and transactions you prevent from taking place.
    Bear in mind that those who fall under the regulations can face prosecution for not following the rules - even where there's no suggestion that there was actually any criminal activity being overlooked.
  • Comms69
    Comms69 Posts: 14,229 Forumite
    10,000 Posts Third Anniversary Name Dropper
    MarcoM wrote: »
    this anti money laundering thing is a joke. judging by the news it does not stop dirty money coming into the uk yet it puts innocent people through all sorts of issues when trying to transact like the op.
    shouldn't law enforcement be able to weed out criminals rather than passing the book on solicitors?



    Which criminals? You never broken he law?...
  • anselld
    anselld Posts: 8,497 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    ReadingTim wrote: »
    I guess it's up to you as to whether the warm glow of complying with government guidance compensates for the buyers you alienate and transactions you prevent from taking place.

    Likewise it is up to buyers to decide if they are happy to miss out on a potential purchase just because they have a strop about AML checks.

    I don’t expect EAs appreciate the bureaucracy any more than buyers do.
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