New Anti-Money Laundering (AML) rules coming into effect early next year will make it the first time letting agents have been subjected to such legislation.
On 10th January 2020, the new AML legislation will come into place that will play havoc with unscrupulous letting agents across the country.
The new rules that are coming into place will mean we as a letting agent must carry out rigorous checks on landlords and tenants involved in rental transactions of £8,500 or more per month.
As it stands, this is very much an EU law which as of January 10th, the UK will still be a part of. As a result, the Treasury are still yet to reveal the legislation that would see how this change is transposed into UK law. Whether or not self-managing landlords should also be covered by the new rules is also in question.
Neil Cobbold, Chief Operating Officer of PayProp UK, commented on the matter: ”
While the Fifth Directive may not affect all letting agencies, those which are impacted will be required to take on significant additional work.
“Given that we do not yet know how high the threshold will be set, estate and letting agents of all sizes should stay informed about their potential obligations under AML rules.
“As well as carrying out the necessary checks on landlords and tenants, letting agents will need to consider Politically Exposed Persons.
“Letting agents are also likely to have to register with HMRC for supervision, although the government is considering allowing industry bodies to supervise.
“This regulation will most likely affect both high-end letting firms and agencies with landlords that rent out multiple properties. It’s important that all firms are clear on whether their current transactions come under the scope of the new rules – and on what is required should they need to make checks on high-value transactions in the future.
“We know that HMRC enforces anti-money laundering rules very strictly, so agencies need to make sure they have all the necessary procedures and contingencies in place.”
Regardless of whether or not fall under this legislation, it is always best to ensure as a landlord with property management or seeking it, that your letting agent is ahead of the curve and is fully compliant on all matters.
With the general election nearing and each party having their own stance on the rental sector (clamping down on landlords in the process), many agents will be looking to spend more time addressing these concerns rather than delivering you as a landlord the levels of property management you expect or deserve.
As a leading Manchester property management company, we not only stay on top of new legislation and assist landlords with ensuring they meet it; but also remain consistent with out unrivalled levels of property management in the process. If you’d like to ensure your properties remain consistently managed with exceptional levels of service, whilst also covered within legislation at the same time, give us a call on 0161 883 2525.