Money Laundering Regulations Apply to Some Agents From January 2020
The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 are to commence on 10 January 2020 and amend The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
Before 10 January 2020, the 2017 regulations applied to estate agents and did not apply to letting agents who don’t also operate as an estate agents.
From 10 January 2020, letting agents are added to the definition of relevant persons under the 2017 regulations but to a minimal extent.
In essence, for the money laundering regulations to apply to a letting agent, there must be a case where an agreement is concluded for the letting of land for a term of a month or more and at a rent that during at least part of the term is, or is equivalent to, a monthly rent of 10,000 euros or more.
The actual full definition of letting agent under the amended regulations is found in the new regulations 13(3) and (4):
(3) In these Regulations, “letting agent” means a firm or sole practitioner who, or whose employees, carry out letting agency work, when carrying out such work.
(4) For the purposes of paragraph (3), “letting agency work” means work—
(a)consisting of things done in response to instructions received from—
(i)a person (a “prospective landlord”) seeking to find another person to whom to let land, or
(ii)a person (a “prospective tenant”) seeking to find land to rent, and
(b)done in a case where an agreement is concluded for the letting of land—
(i)for a term of a month or more, and
(ii)at a rent which during at least part of the term is, or is equivalent to, a monthly rent of 10,000 euros or more.
If, as a letting agent, you don’t have any lettings at a monthly rent of 10,000 euros (about £8,500 at the time of writing - 6 January 2020), then the regulations don’t apply, and no action is necessary.
Suppose you have one or more letting at that rate and meet the full definition above. In that case, you will need to register with HMRC, carry out a risk assessment, conduct training and comply with due diligence under the regulations from 10 January 2020.
Complete information about the duties under the Money Laundering Regulations can be found here.
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