AML check cost

BikingBud

DullGreyGuy said:

BikingBud said:

AskAsk said:

Anthear said:

Voyager2002 said:

Anthear said:

Agree 100% it is greedy - although they make a point of saying that other agents charge more - so they are more greedy ;-)

What to do though??

Explain to them that your solicitor is obliged to carry out AML checks and so can spare them the trouble.

Apparently the agent is legal obliged to do the checks too.....

this is true but my EA says he relies on the solicitors doing it and that is his get out clause.  another agent says they need to do the ID checks for ALM but he isn't charging me as the seller, although he is charging a lot in commission already so that is probably why!  would be interesting to see if they charge the buyers that fee.

Please provide the reference for the legal obligation.

To be part of the PropertyMark scheme they state their members must do AML checks on buyers, similarly various property law firms state an estate agent must do them "by law" without stating which law this is. One site mentioned MLR 2017 as the source of the requirement. 

If they charge for doing this or not is naturally a separate matter. There will be more than one aspect of the charges though... the search for a single individual is probably c£5 but they must be registered with HMRC, the people performing the check must be appropriately trained, costs of records retention etc which all have to be paid for by someone even if its not a per-transaction fee. 

But that is not a legal obligation and while Property Mark, (another trade body) advise the some business have fallen foul of HMRC that is as far as I can ascertain for not registering. 

The most recent compliance and registration penalties published by HM Revenue and Customs reveal 144 agents sanctioned between October and December 2023. Most fines were for failing to register at the required time, and the amounts ranged from £1,250 to £52,000. However, the largest fine on the list is for a High Value Dealer ordered to pay £175,701 for multiple failures in carrying out risk assessments, having the correct policies, controls and procedures, appropriate staff training, conducting due diligence, and record keeping.

So a trade body says:

It’s a criminal offence to trade as an estate agency business without being registered with HMRC for money laundering supervision.

And unless you comply with the registration you cannot join our club!

Still not convinced that there is a legal obligation for EA to conduct AML checks when due diligence can be asserted by using third party, purchaser's conveyancer, checks.

chalky_white_2

Solicitors may be unwilling to share their check, required by regulations, to third parties. Why would they allow a third party to rely on their checks which they are obligated to do, and could put them into additional liability if found incorrect and were also relied upon by said third party?

AskAsk

chalky_white_2 said:

Solicitors may be unwilling to share their check, required by regulations, to third parties. Why would they allow a third party to rely on their checks which they are obligated to do, and could put them into additional liability if found incorrect and were also relied upon by said third party?

to be honest, i prefer the EA to do the ALM as well rather than rely on the solicitors as that will get rid of a lot of time wasters before it even get to the solicitor stage, where you will lose money if it turns out that the buyer fails the ALM checks and so has to drop out.

although the EA ALM checks is more about identity check more than anything, whereas solicitors ALM is more stringent.

Anthear

Interestingly have spoken to the Property Ombudsman who says that the firm have to be open and transparent about the charge for those checks and should make a prospective purchaser aware before the offer is made.  In this case, I don't believe the firm did, but they do have a section on their website but you have to go and look for it...