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Change in anti-money laundering legislation is crucial for London market says Sandfords

By Andrew Ellinas LL.B.Monday, 21 September 2015

Despite having tight controls in place to prevent them being used for money laundering, Sandfords, a Central and North West London agent, are urging the National Association of Estate Agents (NAEA) to lobby the government immediately in order to bring about a fundamental change in the current anti-money laundering legislation, with regards to sub agent due diligence, which will support London agents in their everyday business.

HM Revenue and Customs (HMRC) took over supervision of the estate agency business last year and have since published guidance on how to stay on the right side of money laundering regulations. According to Andrew Ellinas, Director of Sandfords, there is actually a lack of understanding from HMRC as well as the government about the way in which the London market works. He says: The current legislation doesn’t allow for agents in London to carry out their daily working routine and the NAEA need to speak up and apply pressure on the government before agents are heavily penalised for simply doing their job. We understand what is required of us and of our responsibilities, but there is an issue when it comes to sub agent due diligence, checking vendors are who they say they are. In London we work closely with other agents. One agent might find a buyer for a property marketed by another agent. If agreed, they can sell the property for a percentage of the commission fee. As it currently stands, not only would the principal agent have to undertake due diligence against the vendor but also the sub agent, which is near on impossible.”

The legislation states that an agent must undertake customer (vendor) due diligence when establishing a business relationship. “The principal agent begins a relationship with a vendor and so should indentify and verify their identity. The legislation needs to be changed by the government and enforced by HMRC to allow for this information to be passed on to the sub agent if sold via this method of business, rather than having to do it all again.” Says Andrew.

There are many agents and property professionals in support of Andrew’s view who also believe that this legislation has a loop hole. Andrew concludes: “After attending NAEA master classes on this exact subject and speaking with industry experts, nobody has any clear view on how an agent is supposed to act, and the reason being is that HMRC don’t understand the intricacy of the London market. Agents work together and the government need to take this into account as the situation is currently unworkable. Agents will fall foul of the legislation when carrying out straight forward business and this is a huge issue. Whilst the industry appreciates that all agents need to take responsibility and know who they are working for, the NAEA need to be talking to government bodies to ensure agents are protected and aren’t getting fined for going about their normal business.”

ENDS

For further information, please contact:

Holly Addinall, Sandfords PR on 01276 62201 / 07979537334

Editors Notes

Sandfords specialise in the sale, rental and acquisition of prime residential property in Central and North West London, most notable, in the Regent’s Park, Marylebone, St John’s Wood, Primrose Hill and Little Venice areas.

Sandfords was founded in 1985 by Andrew Ellinas, who used his mother's maiden name on the letterhead. The company initially served the Highgate area, but an introduction to James Light prompted a new partnership and a move to Regent's Park. The new office opened in 1994. Expansion was rapid and Sandfords soon gained a reputation as the agents with the best local contacts and expertise.

Sandfords soon saw the logic of expanding south of the Marylebone Road, and in 2006 Tim Fairweather joined the firm to open the Marylebone office.

The firm has been at the forefront of the technological changes that have swept the property sector. Andrew, something of a geek, personally installed the firm's first computer network, at a time when networks were the preserve of big corporations, and he wrote Sandfords' first website. The site was a dynamic websites that could be updated on the fly, one of the first for any estate agent in the UK.

Sandfords were founder shareholders in Primelocation.com, the pioneering property website, and are shareholders in Fabric, the top north London property magazine.

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