AML software for real estate agents: estate and letting agents

• Large single transactions: one purchase can place a significant amount of money in a stable asset.
• Corporate and trust buyers: property bought through companies, trusts and nominees can hide the beneficial owner.
• Overseas buyers: purchasers from other jurisdictions, often never met in person, add identity and sanctions questions.
• Politically exposed buyers: PEPs and their families and associates buy property, and need enhanced due diligence.
• Both parties: an agent's customer may be the seller, but the buyer can also bring risk into the transaction.
• Letting: high-value rentals paid in advance can move money as well as sales can.

1. 1

   Assess the agency's risk

   A written risk assessment of the properties, clients, locations and channels the agency deals with.

2. 2

   Identify the parties

   Customer due diligence on the client and, as national rules require, on the other party to the transaction, including the beneficial owners of companies and trusts.

3. 3

   Screen before the deal progresses

   Sanctions, PEP and adverse media screening of buyers, sellers, landlords or tenants and their owners before an offer is accepted or a tenancy agreed.

4. 4

   Apply enhanced due diligence

   Source of funds and source of wealth checks for PEPs, overseas structures and other higher-risk transactions.

5. 5

   Record and report

   Keep the evidence of each check and report suspicious activity to the financial intelligence unit through the nominated officer.

Under FATF Recommendation 22, real estate agents must apply customer due diligence, PEP measures and record keeping when they are involved in transactions for a client concerning the buying and selling of real estate, and FATF has published guidance on a risk-based approach for the real estate sector.

In the UK, estate agency businesses and letting agency businesses dealing with higher-value rentals are within the Money Laundering Regulations 2017, and are supervised by HMRC. In the EU, estate agents, including when they act as intermediaries in higher-value lettings, are obliged entities under the EU anti-money laundering framework. Other jurisdictions place duties on different parties to a property transaction, such as notaries, lawyers or closing agents, so an agent should confirm which rules apply locally. Sanctions apply to every transaction regardless of value.

• Screening of every party: buyer, seller, landlord and tenant from the same portal or API.
• Ownership checks: a company lookup that reaches the owners behind a corporate buyer and screens them.
• PEP coverage that reaches family and associates, as far as the data allows.
• Quick checks on enquiries: signals that an enquiry is fake or automated, before agent time is spent on it.
• Explainable matches: each alert shows the list and record that matched, so a namesake does not stall a sale.
• Evidence per transaction: a record of who was screened, when and with what result, ready for the supervisor.