The Importance of Compliance
The importance of compliance within the property world cannot be overstated. As a buyer or seller, it’s essential to work with an agent who has the necessary protections in place to protect your investment, should an issue arise.
Before proceeding with an agent, ask for their compliance details. A legally operating agent will be more than happy to provide you with this information.
Below are the four basic compliance requirements that every reputable property agent should possess.
1. Anti-money laundering (AML) registration
AML regulations are designed to prevent the use of illicit funds in property transactions. Any profession that accepts or handles money from clients purchasing property must be registered with HMRC for AML purposes. This registration demonstrates that the agent has implemented the necessary measures to detect and prevent money laundering activities. By working with an AML-registered agent, you can have peace of mind knowing that your transactions are being conducted in a legal and transparent manner.
2. Information Commissioners Office (ICO) registration
In today's digital age, data protection is of utmost importance. The ICO is responsible for enforcing the General Data Protection Regulation (GDPR) rules in the UK. An agent who is registered with the ICO demonstrates their commitment to data protection compliance. This means that they have implemented appropriate measures to ensure the security and privacy of your personal information. When an agent is ICO-registered, you can trust that your data is being handled in accordance with the strict guidelines set forth by the GDPR.
3. Property redress scheme membership (PRS/TPO)
Membership of either The Property Ombudsman (TPO) or the Property Redress Scheme (PRS), is another essential requirement for reputable agents. These schemes provide impartial dispute resolution services in the event of a disagreement between a buyer/seller and an agent. By being a member of a redress scheme, an agent demonstrates their commitment to professional standards and customer service. In the unlikely event that a dispute arises, you can have confidence knowing that there is a reliable and independent avenue for resolution.
4. Professional indemnity insurance
This insurance provides coverage in the event that a claim is made against the agent for any negligent actions or advice. As a buyer or seller, working with an agent who has professional indemnity insurance offers an additional layer of protection. In the rare occurrence of a financial loss due to the agent's negligence, you can have peace of mind knowing that you are protected financially.
Checking compliance details
Below are links which you can use to check a companies compliance details on the publicly available registers.
HMRC AML register:
https://www.gov.uk/guidance/money-laundering-regulations-supervised-business-register
Just over half way down the page, there is a 'Supervised Business Register' link, which will enable you to download the most up-to-date register.ICO membership:
https://ico.org.uk/ESDWebPages/SearchPRS register:
https://www.theprs.co.uk/propertyagent/members/
TPO register:
https://www.tpos.co.uk/find-a-member
Summary
Anti-money laundering (AML) registration
Information Commissioners Office (ICO) registration
Property redress scheme membership (PRS/TPO)
Professional indemnity insurance
Remember: The four compliance requirements discussed above are the bare minimum that any reputable property agent should possess. Do not proceed with any agent who cannot provide these basic compliance details. compliance is a non-negotiable aspect of the property world so that you have confidence in the legality and professionalism of your property transactions.
Disclaimer: This blog post is intended for informational purposes only, and is not investment advice. If you are looking for financial advice, you should contact an FCA approved financial adviser to get regulated advice with your investment decisions.
