AMLG2200 - Sector Specific Guidance: Estate Agent Business Guidance
1. Who is this Guidance For?
This guidance should be read in addition to Parts 1 and 3. The following applies to EABs under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (referred to as “the Regulations” in this guidance).
2. EAB Definition
An EAB is defined in regulation 13(1) of the Regulations, as:
An “estate agent” means a firm or a sole practitioner, who, or whose employees, carry out estate agency work.
Regulation 13(2) of the Regulations states that this definition must be read in accordance with Section 1 of the Estate Agent Act 1979 (referred to as "EEA 1979” in this guidance).
Section 1(1) of the EAA 1979 defines estate agency work. You're legally acting as an estate agent business if you do any of the following:
- Deal with customers for the purposes of buying or selling freehold or leasehold properties in the UK, including commercial and agricultural properties.
- Send out property details and arrange viewings.
- Offer advice to potential sellers or buyers – this includes making recommendations about a property
- Act as an intermediary between buyers and sellers.
- Give customers a For Sale board, or put one up outside their property, with your contact details.
- Have a business that introduces buyers or investors to a “property deal”, also known as property sourcing, deal packaging or investment brokering.
- Have a business that purchases property directly from the owner, with a view to selling it on to a third party. This includes businesses that offer to buy property for a quick sale and developers that purchase/part exchange the purchaser’s existing property.
- Property developers conducting EAB activity. This could include developers that use a separate company or legal entity (often a special purpose vehicle (SPV)) to sell properties that the developer owns.
- Auctioneers that sell land or property.
- Relocation agents who provide property search and home finding service where they act on behalf of the buyer in the sale.
- Competition companies, that sell tickets to win properties, that have been instructed by a seller to list their property.
In relation to (iv) above, your business is within the scope of the Regulations if it receives enquiries from potential sellers or buyers, which you pass on to customers. However, your business will be in scope if you only provide a means for parties to contact each other directly (such as displaying their email address or phone number). See sections 3 and 4 below.
You're still legally acting as an estate agent business even if you:
- Don't have physical premises.
- Run your estate agent business entirely online.
3. Exemptions in the Estate Agency Act 1979
There are some exemptions to “estate agency work”, but only when they are carried out independently of any other estate agency work:
- Private sales that do not use a third party to enable the transaction.
- The publication of advertising or giving out information. For example, a newspaper publishing adverts.
- Providing a platform (such as an internet property portal/sales platform for private sales) for private clients to advertise their properties and provides a means for vendors and buyers to contact and communicate with each other directly. See section 4 below.
- Work done by solicitors or their employees in England and Wales as part of the conveyancing process. If solicitors carry out any estate agency activity outside of their work as solicitors, they meet the definition and must register for supervision with HMRC.
- Solicitors’ property centres in Scotland, but only if they are supervised for AML by the Law Society of Scotland.
- Property management conducted independently of estate agency work.
- Work connected to planning applications and matters covered by the Town and Country planning legislation solely in relation to estate agency work.
- Estate agency work carried out entirely outside of, and with no connection to the UK.
- Work done in the course of arranging mortgages.
Some EABs will offer services also supervised or regulated by the FCA or one of the professional bodies, alongside their EAB activities. If this is the case, they will need to be registered with both HMRC and the FCA/relevant professional body.
The preparation of a home report by a business in Scotland (under section 98, 99(1) or 101(2) of the Housing (Scotland) Act 2006) is excluded as EAB activity under regulation 15(1)(g) the Regulations. This exclusion only relates to the preparation of a home report and does not extend to any other EAB activity the business may be doing.
4. Advertising Provider
You're an advertising provider if you:
- Only pass on the seller's information to a prospective buyer.
- Only provide a way for the seller and buyer to contact one another directly, for example online.
- Don't offer any advice to a seller or a buyer, such as recommending or finding properties, preparing property details, providing photographs or providing an energy performance certificate.
- Provide a branded For Sale board of an EAB to the seller without your contact details.
If your role in property transactions is restricted to the above, you are not classified as an EAB under the Regulations, unless you also conduct any of the “estate agency work” in 2 above.
5. Agents and Self-Employed Agents
A principal-agent relationship exists when an EAB (the principal) appoints another person or business (an agent) to undertake relevant activity on its behalf. If you are an EAB principal, it is important that you fully understand the business model you are operating. This is because responsibility for meeting the obligations under the Regulations may differ depending on the EAB principal’s business model and the contract in place between them and their agents.
The contract between you and any agent you use should make the position clear regarding who has responsibility for complying with the Regulations.
Where you exercise control over the work and activities of the self-employed agent, such as the illicit finance controls and procedures used when the agent deals with customers, then the self-employed agent is acting on your behalf. This means you are the relevant person responsible for the activity undertaken by the agent and the agent’s compliance with the obligations under the Regulations. In these circumstances, you will need to register the self-employed agent’s premises (including home addresses or contact addresses if they do not have a business address). Any failures of your agent to comply with the obligations under the Regulations will be your responsibility and may result in a civil sanction being imposed, or even result in criminal prosecution.
If your agent also carries out work on its own behalf, then it would need to register independently for AML supervision.
Where the self-employed agent has substantial independence in the way it operates, for example makes key decisions on how the business is run, does not operate under your policies, controls and procedures (PCPs) and puts in place its own anti illicit finance controls then they are not an agent of your business. The agent in this circumstance is a relevant person in their own right under the Regulations, and must register with HMRC directly for supervision as an EAB. Under such circumstances, the agent themselves would be directly responsible for complying with the Regulations.
6. Branches
You must ensure that all relevant details of all branches that you operate from are included on your AML registration. This includes ensuring that all relevant officers and managers at the branches are included and are submitted for the approvals test.
Whenever a new branch is opened, you must, within 30 days of the branch opening, notify HMRC of all relevant details of the branch and any person (officer or manager) that is subject to the approvals test.
See AMLG1500 for more information.
7. Franchise Business models
Franchise business models can vary in their operation and in terms of how control is exercised between the franchisee and the franchisor. The level of control determines whether the franchisee or the franchisor is responsible for complying with the obligations under the Regulations.
Where a franchise agreement provides that a franchisee has substantial independence from the franchisor, then a franchisee is not an agent of the franchisor and is operating independently on its own behalf and will need to be registered in its own right for supervision as an EAB.
For example, if the franchisee makes key decisions on how the business is run and puts in place its own AML policies and controls, the franchisee must register with HMRC directly as an EAB and is responsible for complying with the obligations under the Regulations.
Where the franchise agreement places the franchisor in control of how the franchisee operates the business then the franchisor must register and include details of the franchisee as a branch in its registration information.
8. Mobile and Park Homes
The sale or marketing of mobile or park homes can be EAB activity, depending on the precise aspects of the sale and must be considered in conjunction with the definition of an interest in land within Section 2 of the Estate Agent Act 1979.
If you are in any doubt about whether a sale of a mobile home, park home or any other sale of an interest in land is in scope of the Regulations, please contact MLRCIT@HMRC.GOV.UK and provide full details of the transaction in order for HMRC to be able to advise.
9. Shared Ownership Properties
A shared ownership property is a home a person buys a share in, typically between 10% and 75%, while a landlord (often a housing association) owns the rest.
If you are involved in the selling of a shared ownership property, you will need to conduct customer due diligence (CDD) on all owners and the buyer.
If you are a business which is a part owner of the shared ownership property that you are marketing, you will need to conduct CDD on the buyer and the seller (the other owner of the shared ownership property). Dealing with the sale of a shared ownership property constitutes EAB activity.
10. National Risk Assessment (NRA)
The NRA 2025 assesses the risk of money laundering through EABs to be medium.
There is very little evidence to suggest that UK property transactions are used for terrorist financing and the risk of terrorist financing for EABs is assessed to be low.
Please read the NRA 2025 for further information on risks for EABs.
The NRA is a central part of the UK’s “risk-based approach” to countering ML and TF. The NRA sits alongside System Prioritisation which aims to publish a list of economic crime priorities to inform public-private resource. These are intended to support participating parts of the regulated sector to effectively allocate their internal resources on a cost-neutral basis while maintaining their regulatory responsibilities.
Typologies in the NRA should be read in conjunction with the priorities published by the NECC & FCA under System Prioritisation. These priorities are intended to provide context to the risks in the NRA will provide more detail on the priority areas some sectors should note for certain typologies. The priorities are expected to be reviewed annually as well as on publication of a new NRA. When the priorities are published, guidance will be provided on how to relate these to each NRA typology.
You should take account of the system priorities and pay particular attention to anything which might fall into one of the priority categories, making a meaningful SAR where possible, given these activities are of key interest to law enforcement.
To understand the specific risks you, as an EAB, face for money laundering, terrorist financing and proliferation financing, please see Part 3 of this guidance.
11. Proliferation Financing (PF)
For more general information on proliferation financing, please see AMLG1100 section 1.6.
You must have an understanding of proliferation financing (PF) and assess the risk your business faces from PF in your risk assessment, training, and PCPs. Whilst the National Risk Assessment of Proliferation Financing does not mention EABs specifically, you must still be aware of the risks in order to effectively deal with them if any risks arise through the course of your EAB activity.
You should specifically be aware of the higher risk from transactions involving individuals or businesses that could be linked to PF, for example from the Democratic People’s Republic of Korea (DPRK) and Iran.
Please see the National Risk Assessment of Proliferation Financing for more information on specific risks.
12. How can EABs be used for Illicit finance?
To understand the specific risks you, as an EAB, faces for money laundering, terrorist financing and proliferation financing, please see Part 3 – Understanding Risks for EABs, of this guidance.
13. Registration & Approvals Checks
Anyone who engages in EAB activity must comply with the Regulations. A business must not trade as a EAB until they have applied to register with HMRC. See AMLG1500 for more information on registration.
All beneficial owners, officers and relevant managers (BOOMs) of your business are subject to approvals checks by HMRC when applying for registration or when a new BOOM is appointed. You can trade as soon as you apply for registration for supervision, and all BOOMs named on the application (and submitted for the approvals check), can act in their specified roles: they do not have to wait for completion of the approvals check.
Please see AMLG1600 of this guidance for more information on the approvals check.
Further information on who needs to register and how the registration process works is available in the HMRC’s money laundering supervision registration guidance.
14. Legislation
The definition of estate agency work for the purposes of the regulations is defined within Section 1 of the Estate Agent Act 1979. See sections 2 and 3 above.
The Estate Agent Act 1979 is available here.
15. Business relationships
A property transaction involves an element of duration so will always be a business relationship rather than an occasional transaction.
A business relationship is established:
For a buyer, this will be at the point at which the seller formally accepts the buyer’s offer.
For a seller, the business relationship starts at the point an agreement is made, or contract is signed, with the EAB, before the property is marketed.
In the case of a property sourcing business, a business relationship is entered into when the customer instructs the agent, and with the other buyer or seller in the transaction when the offer is accepted. See section 19 below.
Regarding auctioneers, a business relationship is entered into with the seller when the agreement to sell has been made or a contract signed, and with the buyer on the binding of the contract when the gavel has fallen.
For an Estate Agent, the formal acceptance of an offer is considered to take place at exchange of contracts. Therefore, where the customer due diligence obligation on the buyer arises, this must take place and be completed before a binding contract is entered into. This is normally when:
contracts are exchanged
a binding contract is entered into
a sealed bid is opened, if a binding contract is entered into.
If these events do not create a binding contract, customer due diligence must still be completed before the point at which the sale becomes irrevocable.
In order to ensure customer due diligence is completed on time you may consider that a helpful trigger point to begin the process of customer due diligence would be around the time when the terms are agreed, normally on the signing of a Memorandum of Sale by all parties involved in residential sales or Heads of Term in commercial sales, again by all parties involved.
The business relationship with a buyer ends at the completion of the property transaction, or the point of at which an accepted offer is withdrawn or cancelled. For a seller, the business relationship ends at either the completion of the property transaction, or the point where the seller cancels the contract to market the property.
Once a business relationship ends, you must keep a copy of any documents and information you have obtained to satisfy the CDD requirements under the Regulations for five years, after which point, you must delete the data.
For more information on business relationships and record keeping see Part 1 of this guidance.
16. Customer Due Diligence (CDD)
EABs do not commonly handle the funds used to buy a property, unless they are an auctioneer. However, they are a key facilitator in a property sale and may come into contact with both parties to the transaction at an early stage. As such, EABs are in an ideal position to identify suspicious activity.
The customer is the person or entity with whom you form a business relationship and will be both the buyer(s) and the seller(s) of a property. It is important that you take steps to ensure that you have identified all the relevant customers. You can identify all the current owners of a property through a Land Registry check.
You will sometimes deal with individuals who are acting on behalf of your customer (a buyer or seller), this is often when the transaction involves a super prime property or your customer is based overseas. You must ensure that where a person is purporting to act on behalf of your customer, you identify and verify that individual and ensure that they are instructed by your customer to act on their behalf. Where the person purporting to act is also an EAB, for instance a relocation agent or property sourcing agent, you should also check that they are registered with HMRC. In these circumstances you may be able to put a reliance agreement in place for CDD purposes. See AMLG11410 for more information on reliance.
You must also ensure that you complete CDD on the customer too.
The level and extent of the CDD measures that are undertaken will depend on your risk assessment of each transaction and the parties involved in that transaction in line with your overall risk assessment. You must identify each party and verify that all parties to a property transaction are who they say they are. You must carry out CDD on all customers even if you knew them before they became your customers, unless you have previously identified and verified their identity. This is because you must be able to demonstrate that you know all your customers.
For general
information on CDD please see AMLG11300.
17. Timing of CDD
As set out in section 15 above, a business relationship is established at different points of a transaction depending on whether the customer is a buyer or seller.
EABs must complete the ID verification aspects of CDD (regulation 28(2)(a) & (b)), before the establishment of a business relationship as set out in section 15 above (for more information on timing of verification see AMLG11300).
HMRC recommends, that all aspects of CDD, including the assessment of the intended nature and purpose of the transaction, is completed:
For a buyer - as soon as possible, after first contact is made, to avoid wasted costs and delays to the transaction, but before an offer is accepted. At the latest, it must be completed, by the time that a business relationship is established.
For a seller - as soon as possible after first contact is made and at the latest, by the time that a business relationship is established.
An EAB cannot establish a business relationship (see above), with a buyer or seller if they have not completed all aspects of CDD, as per regulation 30.
As set out in section 15 above, where your business is an EAB auctioneer you must complete the CDD checks on the buyer before a binding contract is entered into. This may be achieved by either:
Pre-registering bidders so that CDD is carried out before the hammer falls.
Creating a condition precedent (that customer due diligence is undertaken) so that the contract is not binding until customer due diligence is completed.
The bidders should be pre-warned to bring sufficient evidence to enable an appropriate level of customer due diligence to be carried out. For sellers at an auction, CDD must be completed at the point of agreement to list the property/land.
Where you are unable to apply customer due diligence measures as required by regulation 28, you:
must not carry out any transaction through a bank account with the customer or on behalf of the customer;
must not establish a business relationship or carry out a transaction with the customer otherwise than through a bank account;
must terminate any existing business relationship with the customer;
must consider whether you are required to make a Suspicious Activity Report (SAR).
18. Ongoing monitoring of Business Relationships for EABs
You must continue to monitor a business relationship after it is established and for its duration. More information about ongoing monitoring is available in AMLG11411.
In the event that a tenant decides to purchase their rented property, updated CDD must be completed even if it has been completed before. Where you have not completed CDD previously, because you were not involved in the rental agreement or you were the letting agent but the rental agreement was not in scope of the Regulations, the purchase of the property is the start of a new business relationship and CDD needs to be completed despite the previous relationship.
19. Property sourcing agents, deal finders, investment brokers and relocation agents
In the case of a property sourcing business, deal finder, deal packagers, investment broker, or relocation agent, a business relationship is entered into when the customer instructs the agent, and with the other buyer or seller in the transaction when the offer is accepted.
Where you are dealing with a property transaction where a property sourcing agent, or other agent is purporting to act on behalf of your customer, you must identify and verify that third party (the agent) and ensure that they are genuinely instructed by your customer to act on their behalf. When dealing with other agents you should also check that they are registered for supervision with HMRC. In these circumstances, you may be able to put a reliance agreement in place for CDD purposes. See AMLG11410 for more information on reliance. Simplified due diligence may be suitable to perform on the other EAB in the transaction, depending on your risk assessment and policies, controls and procedures.
For example, a customer instructs you, as a property sourcing agent, to find a property to invest in. You find a property marketed with another EAB that meets your customers' requirements. Your customer makes an offer that is accepted by the seller. You must conduct CDD on your customer at the point they instruct you, and on the seller and the other EAB at the point the offer is accepted.
20. Purchase of Leaseholds, Leasehold Extensions and Enfranchisements
Leaseholds, leasehold extensions and the purchase of a freehold by the current leaseholder (also known as enfranchisements) are within scope of the Regulations, where an EAB is involved in the purchase.
21. Joint Sole Agency Agreements and Multi Agency Agreements
In a joint sole agency agreement, where two estate agents “share” the commission earned, irrespective of who finds the buyer:
- The EAB who did not identify the buyer should request the CDD documentation from the other EAB.
- If the CDD documentation is not provided by the other EAB, the EAB should document in writing that it has been requested and not provided.
Each EAB is responsible for conducting CDD on the seller. You may, subject to checking the other EAB, is registered, be able to put a reliance agreement in place for CDD purposes. See AMLG11410 for more information on reliance.
Within a joint sole agency relationship, both agents would be expected to conduct CDD upon each other as they both receive a commission or percentage of the fee.
If you find that the EAB with whom you intend to be in the joint sole agreement with is not registered with HMRC for supervision for AML purposes, you should immediately cease the business relationship with that EAB and inform HMRC of the unregistered business. You can do this via this link – note, although the link refers to tax fraud, it also is used to report unregistered businesses.
In a multi-agency agreement, where more than two EABs market the property but only the EAB that sells the property earns commission, you should check that the other EABs that you intend to enter the multi-agency agreement with are registered with HMRC for supervision and not enter the agreement with any unregistered EAB. You should also report the unregistered EAB to HMRC via this link.
Each EAB is responsible for conducting CDD on the seller. You may, subject to checking the other EAB is registered, be able to put a reliance arrangement in place for CDD purposes. See Part 1 for more information on reliance.
If you are the EAB that finds the buyer, you will need to conduct CDD on them.
22. Source of Funds and Wealth
As there is an element of duration to all transactions involving the purchase and sales of property, see section 3 above, you will have business relationships with your customers. This will require you to conduct ongoing monitoring throughout the course of the relationship and may require you to verify both source of funds and wealth. You may decide to verify source of funds or wealth on other transactions if your risk assessment requires it.
Verifying your customer’s source of funds and wealth is required when conducting enhanced due diligence (EDD). Where your customer is a politically exposed person (PEP) or from a FATF call for action country you must, as part of your EDD measures, verify the source of wealth and source of funds.
For more information, please see AMLG11630.
Things to consider:
- Has the source of funds changed during the transaction? Extra care should always be taken with cash buyers due to the increased risk of money laundering in purchases not involving a mortgage. Is there a gifted deposit, or a last-minute change of mortgage provider?
- Is the source of the funds to purchase, or fund the deposit, of the property being purchased proportionate with the customer’s income?
- Document your rationale and decision-making - if HMRC asked you what you had done to establish the source of fund and/or source of wealth, would you be able to explain and evidence the decision you had made, why you made it and what you had done to satisfy requirements?
23. Repossessions and insolvency practitioners for EABs
Some EABs, especially property auctioneers, will deal with properties that are being sold as repossessions, or the sale of a business property when the business is in administration or liquidation. This may involve an insolvency practitioner or Law of Property Act (LPA) Receiver being involved in the property transaction.
Depending on the property transaction, you may have to conduct CDD on one or more of the insolvency practitioners, LPA, owner of the property, or lender, depending on the circumstances. These checks should include verifying that the party selling the property has the right to do so.
Remember, your policies, controls and procedures should explain what your processes are for dealing with repossessions and insolvency practitioners, along with how to identify the customer in this situation.
Simplified due diligence might also be used, depending on whether your risk assessment and PCPs correctly allow them to do so, and you meet the additional criteria. See AMLG11500 for more information.
24. Probate
Probate is the legal and financial process of dealing with the property, money, and possessions of a person who has died.
A probate property is a home that is part of a deceased person's estate and is being sold by the executor or estate's administrator. The executor or administrator of the estate will be responsible for selling the property. They will need to obtain legal authority to do this, usually in the form of a grant of probate or letters of administration. This legal authority gives them the power to deal with the deceased person's assets, including the property.
If you are selling a probate property you will need to ensure that the person selling the property holds the relevant legal authority, grant of probate or letters of administration, which will show the names of all executors of the estate. You will need to undertake CDD on all executors and beneficial owners of the estate.
25. Reporting Suspicious Activity
For more information on reporting suspicious activity see AMLG11100.
The nature of property transactions means that several regulated entities are involved, you, a solicitor and a bank for instance. This means that every entity involved may form a suspicion about the transaction and a suspicious activity report (SAR) could be submitted by any of the entities involved. You should never assume that another entity is going to make a SAR or rely on another entity involved in the property transaction to make a SAR.
If you have suspicions of money laundering or terrorist financing, you are legally obliged to make a SAR. It is far preferable that you and any other entity involved all individually make SARs about the same transaction than no SAR is submitted.
The obligation to report suspicious activity applies to the whole business, not just EAB activity. For example, if an estate agent also provides property management services and suspicion arises from the property management side, a SAR still needs to be submitted.
26. Further Sources of Guidance
FATF risk-based approach guidance for estate agents.
Residential Estate Agents in the UK must join a redress scheme. This is a separate requirement to money laundering supervision and is outside of the remit of HMRC, however, it is important to be aware of it. There are two approved redress schemes
The National Trading Standards Estate and Letting Agent team are responsible for the regulation of estate agency work in the UK and letting agency work. They offer a variety of information on their website. Their remit includes overseeing the operation of the Estate Agents Act 1979 and approving and overseeing the UK’s consumer redress schemes,but not anti money laundering supervision.