Providing ID & bank statement to estate agent when buying property

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  • Providing ID & bank statement to estate agent when buying property

    I am buying a btl & the estate agent insistes he needs to see ID and proof of funds. As I'm buying without a mortgage this would presumably be a bank statement. Is this a legal obligation? Am reluctant to provide either unless absolutely necessary.

  • #2
    They are necessary pursuant to the money laundering regulations.

    Comment


    • #3
      Originally posted by Alexlandlord View Post
      They are necessary pursuant to the money laundering regulations.
      Not really estate agent's business.

      As OP claims to be a cash buyer estate agent does not want to waste time and wants to see some proof. This is not uncommon.

      Perhaps OP's bank/solicitor/financial advisor can provide a letter confirming OP has the funds to match his offer.
      I would be reluctant to show a bank statement unless the only information shown is the current balance, and it exactly matches the offer.

      Comment


      • #4
        Hi. You could ask to see written evidence that he needs this information. It's unlikely to be statutory.

        The agent may be working to some internal guidelines. Often they like to see potential buyers details so they can sell them financial products.

        The only problem is if you don't show them, they might deny you access to their properties.

        Cheers.

        Comment


        • #5
          http://www.oft.gov.uk/business-advic.../#.UQzapWcZkQY (Bottom of page)

          http://www.oft.gov.uk/news-and-updat...2#.UQzah2cZkQY

          A snippet from one of the first links;


          "put in place procedures to identify customers and verify the customer’s identity before entering into a business relationship or transaction and to obtain information on the purpose or nature of the business relationship. These procedures are known in the regulations as 'customer due diligence' and also require businesses to conduct ongoing monitoring of the business relationship as appropriate. The regulations specify circumstances in which businesses are not required to undertake customer due diligence measures or must undertake enhanced measures. Further information about how and when to apply customer due diligence measures can be found in chapter 6

          keep records obtained in establishing customers’ identity and of business relationships for five years. Further information on record keeping can be found in chapter 9."


          And from Chapter 9;

          If the verification of the customer’s identity is done by documents this should be based on:

          • A government issued document with the customer’s full name and photo with either the customer’s date of birth or residential address such as:

          - valid passport
          - valid photocard driving licence
          - national identity card
          - firearms certificate
          - identity card issued by the Electoral Office for Northern Ireland

          • or, a government issued document (without a photo) which includes the customer’s full name and supported by secondary evidence of the customer’s address such as:

          - old style driving licence
          - recent evidence of entitlement to state or local authority-funded benefit such as housing benefit, council tax benefit, pension, tax credit

          supported by secondary evidence such as:

          - a utility bill
          - bank, building society or credit union statement
          - most recent mortgage statement from a recognised lender


          This situation has existed for a number of years now.
          I also post as Moderator2 when moderating

          Comment


          • #6
            Ignoring money laundering regulations, it is not that unreasonable for the agent to want some evidence that you are a cash purchaser. My experience in conveyancing is that some "cash purchasers" are nothing of the sort. Some lie outright whilst others may be waiting to sell some shares when the price is right, expecting money from an estate which they are unlikely to get any day soon, have an unmortgaged property they need to sell first which they think counts as being a cash buyer, have the money but tied up in an account which requires three months' notice etc etc.

            A seller, especially one wanting to sell quickly, will favour a cash buyer over one who needs to sell an existing property or obtain finance. The agent needs to be reasonably certain that you are a genuine cash buyer, i.e. that you really can proceed quickly so that he can recommend acceptance of your offer on that basis. If all he can say is: "Well he says he's a cash buyer, but I've heard that before" the seller may decide to wait for a better offer.

            Comment


            • #7
              I still don't think that ID checks for money laundering purposes mandatorily apply to buyers, especially potential buyers, but as already mentioned it makes sense for the seller to check the claim that OP is a cash buyer.

              Comment


              • #8
                The process of money laundering applies to both buyers and sellers. In the case of buyers see section 7.6 http://www.oft.gov.uk/shared_oft/bus...ral/oft954.pdf

                Organised gangs are involved in both the buying and the selling processes.

                "Anti-money laundering

                Money laundering is the process by which criminally obtained money or other assets (criminal property) are exchanged for money or assets with no obvious link to their criminal origins. In the hands of the thief or money launderer, the converted funds or other assets always represent criminal property. It also covers money, however come by, which is used to fund terrorism. The Money Laundering Regulations aim to detect, deter and disrupt money laundering. To comply with the Regulations, certain types of business need to register with the OFT."


                And this provides a more general understanding of why it applies to both buyers and sellers;

                http://www.oft.gov.uk/shared_oft/bus...ate-agents.pdf
                I also post as Moderator2 when moderating

                Comment


                • #9
                  Considering how Russians buy property in London, this is working great.

                  I still don't see how section 7.6 makes it mandatory for estate agent to request ID of potential buyer here.
                  However this is not very important. What is, though, is that OP should not disclose too much when providing proof of funds.

                  Comment


                  • #10
                    Originally posted by jjlandlord View Post
                    Considering how Russians buy property in London, this is working great.
                    Are you suggesting that all Russians are involved in illegal activity and money laundering?

                    Originally posted by jjlandlord View Post
                    However this is not very important. What is, though, is that OP should not disclose too much when providing proof of funds.
                    Section 7 is about reporting suspicious activity. Section 7.6 is a non-exhaustive list of activities that might be considered suspicious such as “checking the customer’s identity is difficult”

                    i.e. if the customer refuses to provide requested information then this should be reported to SOCA.

                    The OP wanted to know why the estate agent was asking for this information and if it’s legally required, I believe the links I have provided explain both points. A little more reading of the info, in addition to the snippets I have quoted, should give a clearer understanding of what is required of the estate agents.
                    I also post as Moderator2 when moderating

                    Comment


                    • #11
                      Thank you for your replies. I have avoided the need to make an immediate decision as I have contacted the seller's solicitor directly so the process is going ahead (EA was refusing to issue memorandum of sale).
                      I do not wish to get the EA into trouble by refusing the info requested but am not convinced it's a legal obligation.
                      The phrase "put in place procedures to identify customers and verify the customer’s identity before entering into a business relationship or transaction". I am not a customer of the EA in this instance. My ID must be verified before I can register the property I'm buying anyway. As I see it the EA is putting buyers in touch with sellers & nothing more. The actual transaction is nothing to do with them. Actually I am a customer of EA as they find tenants for another btl & for which they have not asked either for ID or proof of ownership of property.
                      I will ask the vendor if they have asked for her ID - bet they haven't!
                      I strongly suspect the proof of funds issue is the EA covering their backs in case I don't have the money. My word is my bond & if the seller doesn't believe me (she does) I'll buy another property instead.
                      Mars mug - very useful info, thank you. I think it hinges on being a customer of the EA. I don't think I am (no contract, no money changing hands) so would be interested in your explanation as to why it applies.
                      As it stands I will not be providing a bank statement (will lose interest if just leaving purchase price in) but may provide ID.

                      Comment


                      • #12
                        Originally posted by royw View Post
                        I do not wish to get the EA into trouble by refusing the info requested but am not convinced it's a legal obligation.
                        They are legally obliged to request identification, you may not be legally obliged to provide it, but if you don’t and the EA is suspicious then they should report the matter to SOCA, they may or may not do this. I don’t know how they will view the situation, but I suspect that there’s nothing lost for them if they do report it.

                        Originally posted by royw View Post
                        Mars mug - very useful info, thank you. I think it hinges on being a customer of the EA. I don't think I am (no contract, no money changing hands) so would be interested in your explanation as to why it applies.
                        I think all the answers are in the links provided, some of those .pdf files are not a big effort to read through. If an estate agent is involved in the transaction, then they have clear obligations to verify the legitimacy of the transaction and to inform SOCA if they have suspicions of wrongdoing. I don’t believe that you have to be their direct customer / client.

                        "Customer due diligence

                        10.7 Chapter 6 sets out businesses’ obligations to identify and verify a customer's identity before entering into a business relationship or transaction. For estate agents, the obligation under the regulations is to identify clients. This will usually be sellers (vendors).

                        10.8 Whilst estate agents are required to only undertake customer due diligence measures for sellers when acting as their agents, best practice would be to identify the purchaser in addition to the seller once an offer has been accepted."
                        I also post as Moderator2 when moderating

                        Comment


                        • #13
                          "suspicious", "best practice", etc. fair enough, but where is the legal obligation to require ID of potential buyers? Is it by default suspicious to be a cash buyer?

                          Royw:
                          as previously said, this is not very important. Focus on showing that you are a serious cash buyer without showing your hand.

                          Comment


                          • #14
                            Originally posted by jjlandlord View Post
                            "suspicious", "best practice", etc. fair enough, but where is the legal obligation to require ID of potential buyers? Is it by default suspicious to be a cash buyer?
                            No, cash buyers are not by default suspicious, the cash buyers who refuse to provide requested ID may well be.

                            Royw is welcome to follow your advice, he’s not a money launderer, the worst thing that might happen is he could be investigated and quite probably completely without his knowledge, and he will hear nothing of it.

                            As cash buyers myself and my partner had to provide ID, passports and other documents, to my bank and to my solicitors. In our case there was no estate agent involved. Both the bank and the solicitors explained that the purpose was in relation to money laundering regulations.
                            I also post as Moderator2 when moderating

                            Comment


                            • #15
                              Originally posted by Mars Mug View Post
                              As cash buyers myself and my partner had to provide ID, passports and other documents, to my bank and to my solicitors.
                              That's my point. I am happy to provide ID to the solicitor who registers the property transfer as they have a legal obligation to check it. My bank is entitled to check it is me who is transferring the money. If they are going to investigate everyone who declines to give personal information to anyone with such a tenuous connection they will be very busy!

                              Seems to me Money Laundering is the financial equivalent of Elf 'n Sefty and we are not supposed to question it.

                              Comment

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