Letting agents are being subject to unnecessary strictures around their pooled client accounts, from high street banks who are still misinterpreting anti-money laundering (AML) regulations, Propertymark warns.

Letting agent members have reported that banks are asking them to carry out Customer Due Diligence to the level as set out in the Money Laundering Regulations when all letting agents are not legally required to do so.

THRESHOLD

The trade body says that one solution to this is for the UK Government to remove the €10,000 (EUR) monthly rent threshold and set this at zero to create consistency and cover all tenancies let in the private rented sector.

All letting agents would then be required to register with HMRC for Anti-Money Laundering Supervision which would provide banks with the reassurance they need and reduce a barrier that can make it hard for agents to operate.

ARBITRARY

Rather than making arbitrary decisions, Propertymark says that banks should be referring to updated industry guidance from the Joint Money Laundering Steering Group (JMLSG). This allows them to take into account other regulatory or professional conduct obligations, and the legal requirement for all letting agents to have Client Money Protection (CMP).

For letting agents, it is simply not feasible to have separate accounts for each of their clients.”

David Oliver, Compliance Manager for Propertymark, says: “This is a frustrating, time consuming and unnecessary issue for our members especially when the banking industry’s own guidance from the JMLSG is clear that the legal requirement for CMP and our own regulatory rules as a professional body should be enough to satisfy any risk.

“For letting agents, it is simply not feasible to have separate accounts for each of their clients or even necessary if they are Propertymark members because of the protections in place through our compliance process that requires them to provide details of their CMP on an annual basis.”