Anti-Money Laundering Checks with CR Real Estate

What are Anti-Money Laundering Checks?

When buying or selling a property, we will ask you to confirm your ID and where you secured your money from to buy the property. This is standard practice, and we have a legal duty to do so. At CR Real Estate we charge a cost of £25 + VAT / per person for Anti-Money Laundering Checks. Please note, these services are provided by carefully selected third parties and must be paid for in advance.

In April 2018, the European Parliament passed the Fifth Money Laundering Directive on the prevention of money laundering and terrorist financing. For this reason, estate agents must do these checks on everyone buying a property to make sure the money is coming from a legitimate source—they can be fined or imprisoned if they don’t.

Proof of funds

Proof of funds can be requested for different reasons, so don’t be alarmed if you are asked to produce yours more than once.

For instance, it’s not uncommon for estate agents to ask for proof of funds prior to you making an offer. This isn’t a legal requirement, but many agents choose to ask in order to validate the legitimacy of your offer and ensure you are serious about proceeding. The purpose of doing so is twofold, as it provides a certain amount of peace of mind for both the agent and the seller that you are not going to waste either party’s time.

The real anti-money laundering checks come after you have made an offer. Your estate agent will then be required by law to check that you have the money required to make the purchase and that those funds haven’t been obtained in a felonious fashion. As a buyer, you must prove that you have the money if asked at this stage. The purpose of this is to check that you have the money to purchase the property but also that you haven’t acquired it through criminal means.

How can I provide proof of funds?

When it comes to providing proof of funds, you can do so via the following means:

  • An agreement in principle/mortgage in principle
  • Bank statements of your deposit amount (for mortgage buyers)
  • Bank statements of your cash amount (for cash buyers)
  • Further bank statements from past months/years to show how your money has built up over time
  • Evidence of you selling a property (if using the funds to buy the new property)
  • If you’ve been gifted the money, a letter from whoever gifted the money
  • Evidence of money being left to you in a will
  • Receipts of shares being sold

In more unique circumstances, if you’ve been lucky enough to win the lottery, you may be asked to prove so. Likewise for gambling winnings where you could be asked for receipts/evidence of winnings. It’s best practice to retain evidence of where all the funds going towards your purchase have come from, this way you can be prepared should we ask for it.

Proof of ID

It is our legal duty to make sure that you are who you say you are, and we will ask you for proof of your current address and your identity. This process is called ‘Due Diligence’ which forms part of our checks. You will be asked for some of the following forms of proof of identification.

Proof of name:

  • Current passport
  • Residence permit
  • Current UK/EU photo driving license
  • HMRC (Inland Revenue) Tax Notification
  • State pension or benefits book/notification letter
Proof of address:

  • A current tax bill from your local authority
  • Rent card or tenancy agreement from your local authority
  • Recent mortgage statement
  • Bank statement
  • Utility bill (not mobile)

Who else requires proof of funds?

Your mortgage lender, solicitor/conveyancer will also ask for proof of where your money has come from. Do not be put off if you get asked for proof more than once—it is a legal requirement for everyone to check where your money has come from.

Like estate agents, lenders and solicitors can be fined or imprisoned if they don’t undertake these checks. Most commonly estate agents, lenders and solicitors are all separate; just because you’ve shown proof to one, doesn’t mean the others will have seen it.


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