Anti-Money Laundering Checks Without Losing the Client
Estate agents are supervised for AML and the obligations bite earlier than most agents think.
Estate agency businesses are supervised for anti-money laundering purposes, and the obligations start earlier in the relationship than agents assume. Done clumsily it feels like an accusation. Done routinely it takes four minutes and nobody minds.
What is actually required
Estate agency businesses must register for supervision, have a nominated officer, maintain a written risk assessment, and carry out customer due diligence. Registration is not optional and operating without it is an offence.
Due diligence applies to both parties in a transaction, which surprises agents who assume it is only the buyer. Identifying your seller is part of it.
The trigger point is earlier than completion. Checks belong at the start of the business relationship rather than at the point money moves.
Enhanced due diligence applies in higher-risk situations, including politically exposed persons and certain jurisdictions, and it means more evidence rather than a different attitude.
Timing and the awkwardness
Source of funds is a different question from proof of funds. A bank statement showing a balance proves the money exists; it does not explain where it came from, which is the part that matters.
Frame the check as universal and administrative. "We do this for everybody before we can act, it takes a few minutes" removes the implication that this client has been singled out.
Do it at instruction, when the client is already filling in forms, rather than mid-negotiation when it feels like an obstruction.
Keep the records for the period your supervisor requires, and keep them retrievable. An inspection that finds good checks you cannot produce is treated as no checks at all.
Records and red flags
Train everyone who meets clients, not just the nominated officer. The person who spots something unusual is usually the one doing the viewing.
If something feels wrong, the route is your nominated officer and a suspicious activity report. Telling the client you are concerned can amount to tipping off, which is itself an offence.
The obligations are set out by HMRC as the supervisor for the sector, and the guidance is public. It is the document your inspection will be measured against, so read that rather than a summary.
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Try PropVid free See all 1,094 templatesFrequently asked questions
Do I need to check the seller as well as the buyer?
Yes. Customer due diligence covers the parties to the transaction, and agents who only check buyers are a common inspection finding.
When should AML checks be done?
At the start of the business relationship rather than at the point of completion. Doing them at instruction is both compliant and far less awkward.
What do I do if a transaction looks suspicious?
Report it internally to your nominated officer, who decides on a suspicious activity report. Do not raise your concerns with the client — that can amount to tipping off, which is an offence in itself.
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