Trade body Propertymark has revealed that it has opened compliance cases against a small number of members following the latest HMRC publication of businesses who have failed to comply with anti-money laundering (AML) regulations.
In total, 68 agents have been issued penalties, five of which are Propertymark members. These businesses failed to comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 during the period from January 1 2022 to March 31 2022.
The nature of the published breaches included failing to apply for registration at the required time; failures in carrying out risk assessments, having correct policies, controls and procedures in place; conducting due diligence and record keeping; and failures in the provision of registration information.
Among those estate agents and property companies who received a penalty were Edison Green Estate Agents, Ayr Estate & Letting Agents, Horton Estate Agents, Knight & Knoxley, Arden & Way, Lamberts Estate Agents, Roman James, Laming Hope Residential, Stacey Mann Estates and IMW Estate Agents. None of those who received penalties appealed the decision.
Some of the penalties were significant, with Horton fined £53,400 for failing to apply for registration at the required time, while IMW received a £13,400 fine for the same offence. Roman James Estates was hit by a nearly £25,000 fine, Janice Chissick Estates got a near £12,000 fine, Laming Hope Residential got a £12,014 penalty, and Knight & Knoxley a £29,000 fine.
Additionally, Arden & Way was hit with a £14,000 fine and Falmouth-based agency Stacey Mann Estates got a fine for £26,400. All these fines were for failing to apply for registration on time.
Estate agents were fined a total of £519,645 for not complying with rules designed to stop criminals laundering money from illegal activity.
You can see the full list of companies and penalties here.
In response, Propertymark has beefed up its compliance team and cracked down on non-compliance of money laundering regulations.
In a statement, the body said: “Ongoing work to support members in reviewing compliance with legislation is a key area for Propertymark’s team of compliance auditors. This involves regular reminders about responsibility and liability, updates on HMRC and Trading Standards enforcement and penalties, and information on data protection.”
Propertymark said that it knows that compliance can be a minefield for both lettings and sales agents and legislation is constantly changing. It insists visits from its compliance team have proven to be invaluable to its members.
“Propertymark undertakes visits in person and is currently undergoing development to get their team members out and about more frequently to review and support the procedures agents have in place. This provides an opportunity for agents to get feedback on how they comply, have open discussions about how best to implement any new regulations, guidance and best practice, and ensure they are up to speed with what can seem like a constantly evolving industry,” the statement added.
“Propertymark’s goal is to achieve visits to each of its member firms at least once within a five-year rolling period and unlike HMRC or Trading Standards, the regulatory body gives a minimum of 10 working days’ notice before a visit.”
Propertymark has encouraged its members to fully engage with them and the compliance review process in order to ‘maximise the benefits’.
“Ultimately, Propertymark is here to help and support your agency, continue to raise standards and preserve the long-term health and prosperity of the profession,” the statement concluded.
The fines followed the first prosecution of an estate agent for trading despite not registering with HMRC.
Felix Uwuigbe, director of Century House Estates Ltd in London, was sentenced to 120 hours of unpaid community service and banned from acting as an estate agent for two years after he was convicted of trading for three months while unregistered.
Nick Sharp, HMRC’s deputy director of economic crime, said: "We are determined to create a level playing field for businesses who play by the rules. That means taking action against the minority of businesses who fail to fulfil their legal responsibilities under the money laundering regulations.
"Money laundering is not a victimless crime. Our regulations are there to protect businesses from those criminals who would prey on their services to wash their dirty money.
"Serious and organised crime costs the UK billions of pounds every year and our anti-money laundering supervision is a vital tool in combatting that."
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Harsh, very harsh. Not only is AML less appealing to read about than watching paint dry, but it's also a lot to ask of small agencies that struggle to find the time to keep up with mounting legislation anyway. Not to mention the amount of ongoing training and record keeping. It's tough, very tough.
If its just late payment..these are completely disproportionate fines. Gateway is so hard to navigate..wish it was more like DVLC. .
Until Ukraine of course the Government was happy for the Oligarchs to buy up London real estate.
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