On 10 January the fifth money laundering directive came into force in the UK. Our previous detailed post can be read here.
We were hoping for a guidance document to assist with a further post but unfortunately the wait continues. With that in mind we can only give brief details of the legislation and what it may mean for agents, but this may all change once the guidance is issued by the government.
Lettings agents that carry out high value transactions with a monthly rent of EUR 10,000 or more will be directly impacted by the 5MLD. Where high value transactions are carried out agents will need to conduct their due diligence before any transaction is entered into. The obligation is that agents must know who they are contracting with prior to entering into any contract that is prior to signing any terms of business.
Knowing who your client is will also extend to properties that are owned under the cloak of beneficial ownership registered abroad. Agents are not expected to achieve the impossible therefore this obligation will only be met where registers or electronic data retrieval systems, such as the land registry, are available to those carrying out the due diligence.
In this context the obligation to do checks is not only in respect of the landlord but is very likely to require checks on prospective tenants as well, just as is required for estate agency. Finally, the obligations also extends beyond letting agents and will impact on relocation agents acting for tenants as well.
The contents of this blog post is not legal advice and is provided for general information purposes only. If legal advice is needed readers should contact a solicitor. No responsibility for any information contained within this post is accepted and PainSmith solicitors accepts no liability in respect of the contents or for action taken based on this post.