Letting agents in the UK face having to conduct mandatory anti-money laundering checks on tenants paying more than £8,800 a month in rent, it has been revealed, and may also have to electronically check identities as a matter of course.
These requirements have been inserted into the latest Anti Money Laundering Directive by the EU several days ago which, despite Brexit, is likely to make it into law within 18 months.
Although £8,800 or more a month might sound like an elite slice of the lettings indsutry, in London over 5% of the market or nearly 3,000 properties would be affected.
Martin Cheek, Managing Director of AML verification platform SmartSearch (left), who has examined the proposed 5th Money Laundering Directive on behalf of The Negotiator, says the draft legislation also suggests that electronic verification of tenants, and vendors/buyers in the sales market, may become mandatory once the legislation passes into UK law.
The AML regulations directive requires that the method of carrying out customer due diligence be widened “to include” electronic verification.
“It’s not clear yet whether it will become mandatory, but in the UK we have a habit of ‘copper bottoming’ EU directives and going much further than other countries when turning them into law,” he says.
“For the same reason I don’t think Brexit will put a spanner in the works of this new draft directive, because London will want to harmonise UK law with the EU to protect our massive financial services industry.”
SmartSearch, which recently won a Queen’s Award for Enterprise, is used by several hundred estate agents across the UK to verify tenant and buyer/vendor identities from large corporates to smaller independents.
“Our service is designed solely for AML verification purposes but it can be used for Right to Rent immigration checks as well,” says Martin.