The Government has dropped a big hint that supervision of letting agents for anti-money laundering purposes will be by a membership organisation rather than HMRC
It has stopped short of naming, for example, ARLA, NALS or RICS, but does say that professional bodies can apply to become supervisors.
It is also possible to infer that an estate agency membership organisation might in future regulate its sales agents members.
The suggestion comes in a new consultation on extending anti-money laundering rules to letting agents when the Fifth Money Laundering Directive takes effect.
Currently, this would be by January 10, 2020.
Estate agents are already in the scope of anti-money laundering rules, but letting agency activity is not covered.
The Government is proposing that the fifth directive should apply to high value letting transactions, with a monthly rent of EUR 10,000 (about £8,600) or more, although it does query whether this is the right ceiling.
One of the other questions in the consultation is whether the requirement for customer due diligence should be carried out on both landlord and tenant.
HMRC currently supervises estate agents, and the consultation says: “The Treasury considers HMRC as a supervisor suited to the role of regulating letting agents, given HMRC is the primary advisory for this sector”.
It goes on: “The Treasury will however consider appointing self-regulatory body supervisors of letting agents, similar to estate agents.
“Professional bodies can apply to the Office for Professional Body Anti-Money Laundering Supervision to become supervisors.
“If implemented in practice this would mean that those businesses that were members of eligible estate agency or letting agency professional bodies could be supervised by those bodies [for anti-money laundering purposes] rather than by HMRC.
“HMRC would remain the supervisor of letting agents of relevant agency businesses that were not members of these bodies.”
The consultation canvasses the opinions of both the professional bodies and of agents, asking: “Are you a member of a professional body and would this body be an appropriate supervisor? If this body would be an appropriate supervisor, please state which professional body you are referring to.”
It has been an open secret for some time that Propertymark has ambitions to become an industry regulator, with proposed licensing, compulsory qualifications and minimum standards of entry of both sales and lettings agents on the horizon.
The closing date for responses to the latest consultation is June 10.