With ever increasing obligations, estate agents know that compliance matters now more than ever.
However, being able to obtain access to the right expertise, knowledge, experience and services has not always been easy, but there is one firm that claims to provide the ‘complete solution’ for property professionals, and that is ETSOS, which offers an advanced technology search ordering platform for estate agents and conveyancers.
So this week we have decided to talk to the firm’s director of agency services, Ben Robinson (below), to find out more about their service.
What is ‘Compliance in a Box’?
In a nutshell, ‘Compliance in a Box’ ensures agents do not fall foul of their obligations under two key pieces of UK legislation; the Consumer Protection from Unfair Trading Regulations 2008 and the Money Laundering Regulation 2007. Failure to fulfil their obligations under either can lead to significant fines and potential compensation.
With the ever increasing administration and regulatory burden on agents, how important is it to have a strategic partner who can help reduce this burden without increasing staff cost?
As estate agency grapples with increasing regulation it needs to ensure that it does not lose sight of what it is being paid to do...sell houses! In the same way a house seller is utilising the expertise of agents because they are not experts in selling houses, so should agents seek to build strategic partnerships with businesses who are expert in the things they are not.
What service does ETSOS provide that’ll enable agents to focus on their core revenue generating activities?
All too often we allow mundane administrative tasks divert focus away from our core business activities. How many estate agents are paying valuers and negotiators for the time it takes to chase vendor documentation when they could using that time to chase up leads and winning more listings?
By removing the need for vendor ID in the vast majority of cases and moving checks online, agents can streamline this process and leave the business of selling houses to those in the business who specialise in it.
What is the importance of online from a compliance point of view?
Decisions from The Property Ombudsman – in the case of Consumer Protection Regulations (CPRs) - and HMRC – in the case of Money Laundering – focus on the agent's ability to document and evidence activity.
Compliance is not optional; our advice is to document and evidence activity to ensure you have the audit trail. Online presents a very simple way to order reports, evidence activity, create an audit trail and retain records for the requisite amount of time.
How can ETSOS help with consumer protection regulations?
CPRs have replaced the now repealed Properties Misdescriptions Act. This has signalled a significant shift away from the emphasis on the buyer to ask the right questions, to the requirement for the agent, and critically the vendor, to provide the right information up front.
The Property Ombudsman has now cited the CPRs in several decisions in which agents have either misled or failed to provide enough information to buyers.
With the NAEA we developed an online property information form which evidences that information has been requested and provided to buyers.
How can ETSOS help with anti money laundering checks?
The money laundering regulations require businesses to better understand the relationship they have with their customers and to this end Customer Due Diligence (CDD) must be proportionate to the risk posed.
So in most cases confirmation of the ownership of the property (Land Registry Title Register) and verification of the identity of the owners (electronic AML checks) are perfectly reasonable.
Deliberately evasive vendors, unusually hurried transaction and large cash deposits should raise alarm bells and further investigation should be undertaken.
You would expect ETSOS to favour electronic over traditional, paper checks as we believe they offer a number of benefits.
Firstly, they provide the business with a consistent approach, with no concerns about whether or not one person has a passport or not, or another has utility bills. Electronic checks can be done with some basic information.
Secondly, they will establish whether you are dealing with somebody on sanction lists or a politically exposed person (PEPs), you will struggle to do this without electronic checks.
Finally, all the records are retained indefinitely in secure storage, with no risk of loss, theft, fire, and so forth. We compare it to outsourcing tenant checks, or going from paper management to an online property management system.
What else should agents do to help their clients and how can ETSOS help?
Education, education, education…the CPRs place a legislative responsibility on vendors. Very few people will understand that when they come to list their property.
And while care has to be taken here, ultimately more information up front means better quality viewings with less chance of a fall through because all the questions have been answered before you go down the route of instructing the conveyance.
Compliance in a Box will help to uncover information, record it and provide agents with an audit trail to evidence their compliance activity.
What sort of guides and updates on regulation changes do ETSOS provide agents with?
Compliance in a Box clients have access to a range of resources all designed to keep agents up to date with the latest changes to the regulation that affects them.
Quite unusually, the Money Laundering regulations must be one of the only pieces of law in which training is legislated – not recommended, but mandated.
And as such punished financially when not adhered to which is why we saw the significant fines in 2014/15.
We regularly maintain an open dialogue with our clients about the compliance landscape with access to training, on and offline events and our Compliance Hotline.
And what does the future hold for ETSOS?
We are really excited about some of the developments we have in the pipeline. We are looking at the lifecycle of the transaction to see how else we can supports agents from a compliance point of view.
One of our key aims is to find ways of turning the sunken cost of compliance in to a potential revenue generator for the business; looking at using the information agents are capturing in order to comply with the CPRs to shorten the legal process and make property more appealing.
We have a compelling proposition for auction departments, offering them an additional revenue stream and helping them with their compliance obligations.
ETSOS has always been about making the lives of our user’s easier and that ethos continues in the solutions we are developing.
*Marc Da Silva is Estate Agent Today and Letting Agent Today Features Editor. You can follow him on Twitter @propertyjourno