Understanding AML Checks: What Every Homeowner Should Know

Buying or selling a property is a super exciting time but it can soon be ruined by the seemingly endless red tape and providing copies of ID, but there is an important reason, this article explains it all.

As you embark on the journey of selling your house or buying a new one, you'll inevitably encounter the acronym AML. Understanding the significance of AML checks is crucial in today's real estate market.

What is AML?

It stands for Anti-Money Laundering and refers to legislation to help prevent people from using property to launder money. According to the legislation with Gov.uk -

"Money laundering is how criminals change money and other assets into clean money or assets that have no obvious link to their criminal origins. Money laundering can take many forms, but in the property sector it can involve:

• buying a property asset using the proceeds of crime, letting it or selling it on, giving the criminal an apparently legitimate source of funds
• criminals hiding behind complex company structures involving multiple countries and multiple bank accounts to disguise the real purpose of a transaction and hide its beneficial ownership
• a more direct method of paying an Estate Agency business or Lettings Agent a large amount and reclaiming it later
• the money for a purchase resulting from a mortgage fraud operation
• Ghost lettings in different forms, such as:
  • Where no one physically occupies the premises when you would reasonably expect there to be an occupier, and rent is paid regularly
  • Properties advertised as 'to let' but not available.

It's the responsibility of estate agents to conduct AML checks, ensuring the validity of offers and the individuals making them. This process is designed to minimize the risk of property being used to launder illegal funds, providing you with a sense of security in your property transactions.

Initially, and for most people, there will simply be a check of your ID to confirm that you are who you say you are. You will, of course, be asked to provide evidence of any cash used to pay for the property to ensure that it is in a banking system of some kind, too. An AML check is designed to double-check that you are, in fact, who you say you are and to establish if you could potentially be vulnerable to coercion by criminals. We must consider your personal circumstances and confirm if you fall into a category known as a PEP - Politically Exposed Person. The potential for criminals to bribe is far higher for people of influence. If this is you, further checks and confirmations are required to ensure that you are not being forced to use illegal funds to buy a property for a criminal enterprise.

Is this really an issue?

While the idea of money laundering may seem far-fetched, it's important to remember that it's highly unlikely you or anyone in your property chain will have to deal with these issues. The high value of UK property has made it a target for criminals, but the chances of you being directly affected are slim.

This article aims not to teach you how to launder cash but to explain what the average homeowner has to provide to comply with this legislation.

So what do you need to do?

You and every other person named on the title deeds, or who will be named if you are buying a new home, must provide evidence of two forms of ID. These must be one piece of photographic ID (such as a passport or driving license) and a second that confirms your current address (such as a recent utility bill or bank statement).

Some agents will do these checks manually, but there are many ways to digitally comply with your AML checks to prevent you from making a special trip into the office, and a small administration fee may be attached.

Then what?

Once you have complied with the AML checks, you can proceed with your move, whether you are buying or selling, or both. You will be requested to fulfil the same criteria, again providing copies of your ID to your solicitor when you accept an offer and begin the legal process. It's unlikely that a solicitor would take copies of the checks already done by the agent some months ago, so yes, although it seems a bit overkill, you will be checked for Anti-Money Laundering at least twice during the process.

If you are planning a move and want to know where to start, why not visit our website and get a free estimate valuation of your property? Click Here