ECSH53200 - Estate agency businesses providing letting agency business or other supervised sector services
It is not unusual for an estate agency business (EAB) to provide services which would fall within the definition of a letting agency business (LAB), due to the similarity and closeness between the property sales and lettings industries.
Many EABs will offer lettings services, but not all will offer rents above the threshold requiring LAB registration.
There are also a number of EABs that offer activities that fall under other supervised sectors, such as accountancy service providers (ASPs) and trust or company service providers (TCSPs). An EAB could act as a multi-service provider offering both EAB and TCSP services. For example, the business may combine a property transaction with the formation of a separate legal entity for its customer in order topurchase the property. Similarly, an EAB that also does lettings below the threshold may also act as an ASP, by providing bookkeeping for landlords, or submitting a non-resident landlord tax return.
The combination of multiple supervised services will increase the risk that the business can be used, or exploited for the purposes of money laundering, terrorist financing or proliferation financing. The increase in risk to the EAB’s business model should then be factored into the EAB’s risk assessment. This assessment should then be included under the business’s risking of its services and delivery channels.
In all cases the business’ registration for anti-money laundering supervision must describe all of the relevant activity it conducts, and it must adhere to all of its obligations under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017). For example, the risk assessment and policies, controls and procedures of the business would need to cover all of the risk factors and relevant procedures within each supervised sector. Businesses that have not updated their registration to include all the sectors they operate in, or no longer provide a service included on their registration, must be considered for a type 3 penalty for failure to update a material change. Officers must also be aware of any fit and proper requirements, if an EAB is also providing TCSP or MSB services.
Where the EAB is providing other relevant activities for which registration is required, you should refer to the sector pages at ECSH50000 for further information.
Officers should be mindful of the increased risks of a business operating in more than one regulated sector. Businesses that operate in multiple sectors have an increased risk that they could be acting as a professional enabler for illicit finance, due to the extent of the regulated services they offer. There may be legitimate business reasons, or a market to offer this combination of services, but officers should explore this and ascertain the reason for providing the combination of services provided.
Unusual combinations of services should be fed back to the campaign ringmaster, your team leader and to the EAB sector lead, to help inform risking, strategy, and future campaigns.