The Anti Money Laundering Act

Anti Money Laundering (AML) Checks Are Extremely Important!

Here, the Greenaway Residential Estate Agency team explain what these checks involve and which documentation you will need to supply to the authorities.

Money Laundering Checks – What Are They?

Money laundering is a process during which money that has been obtained in an illegal manner is passed through a legitimate financial channel to “clean” it. There are many different channels that criminals use for this purpose, from legal businesses that act as fronts, to loan repayment schemes, and, of course, property purchases. In order to combat this criminal activity, all property transactions are subjected to AML (anti-money laundering) checks before they can complete.

Which Documents Must I Produce for AML Checks?

There are three different categories of documents that you’ll need to produce to satisfy the AML checks:

• Proof of your identity
• Proof of funds
• Source of funds

Let us take a closer look at all three of these separately.

Identity Documents

The authorities need to know that you are not pretending to be somebody else, so you need to provide documents that prove your identity such as a passport, photo driving licence, recent bank statement, mortgage statement, tax bill, tax notification, utility bill, your benefits or pension book, a recent local authority tenancy agreement or a biometric residence permit.

Proof Of Funds

You may need to supply proof of funds several times, but for AML purposes, you will need to supply evidence after you’ve made your offer on your chosen property. You can supply the following as proof:

• A lender’s mortgage in principle agreement
• A bank statement that shows your deposit
• A bank statement that shows the entire asking price if you are a cash buyer
• A letter of proof for a gifted deposit
• Evidence of your property sale if you are using this money to fund your purchase

Source Of Funds

The source of your funds is not quite the same thing as proof of having the money. It proves where the money came from and not just that you have it. The proof you will need will depend on the source of your money e.g. your bank statement or a letter from a family member about their gift of a deposit.

What Happens If I am Funding My Purchase With Money From Overseas?

If you will be funding your purchase with money from overseas, you may find that you fall foul of today’s money laundering laws. Gifts, funds, and deposits that come unto the UK from certain countries may not pass the AML checks, so you should always run your source past your conveyancing team before committing to a purchase. If you are using funds from a high-risk country, or even from somebody with links to high-risk countries, your funds may be declined.

How Many Times Will I Need To Go Through This Process?

Usually up to three times.  Once for the Estate Agents, then if you are arranging a mortgage you will need to do it for you Financial Adviser/Mortgage Lender and finally for your Conveyancer/Solicitor.

For more local property news and updates and a more detailed overview of the West Sussex, Surrey and Kent area, get in touch with Greenaway Residential Estate Agents & Letting Agents.

When Do I Need to Show My Documnets

When selling a property you will need to show the relevant documents prior to going on the market and when making an offer it is at the point of making an offer.  For the lettings side of property transactions, when putting a property on the market to let it will be at at the point of intructing a letting agent.  For tenants it is before money has been passed over, i.e. before a holding deposit is taken.

Greenaway Residential Estate Agents Crawley 01293 561188

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