The process of finding, securing and moving into your new house can take many months to complete, with there being several stages you need to complete before you can make the property your home. AML checks are just one of these checks. But AML checks when buying a house are nothing to worry about, with the process being simple and straightforward as long as you have the right documentation.
At SmartSearch, we make this process even simpler for businesses of all shapes and sizes. Providing a range of solutions, our anti-money laundering service is totally comprehensive, offering the capability to perform robust KYC checks, PEP screening and much more. When it comes to the property industry, we are specialists in AML, helping estate agents and development companies to stay compliant.
But if you’re hopeful to soon be a homeowner and are looking for the AML checks you need when buying a house, then read on.
Anti-money laundering checks (or AML checks) are measures put in place to prevent illicit money laundering activities from taking place. These checks take the form of various customer verification processes, transaction monitoring solutions and more to ensure that your customer is maintaining good financial practices. These checks are a legal requirement for businesses across the world.
AML checks are crucial for identifying financial crime, criminal organisations and terrorist financing, helping the government’s efforts to combat corruption. According to estimates from the National Crime Agency (NCA), £10 billion of illegal money is laundered each year in the UK, making robust AML processes crucial to protect the health of the country’s economy.
The property market is a prime target for criminals looking to disguise the moving of large funds, since the industry sees vast sums of cash being transferred on a regular basis. AML checks when buying a house are, therefore, necessary for estate agents and other parties to identify potential illicit companies and financial criminals, protecting the solidity of the UK economy and the legitimacy of their own business in the process.
Thankfully for house-hunters who want to get the process completed as quickly and efficiently as possible, you’ll be pleased to hear that the AML checks when buying a house aren’t complex and usually only take a matter of weeks to be completed. Essentially, the process involves three steps: identity verification, address verification, and a proof of funds check (to make sure that the funds you will be using were gained legitimately).
First things first, the estate agent will need to carry out an identity verification check. This check is performed simply to ascertain whether the buyer is exactly who they claim to be. The process of identity verification is straightforward and involves three steps.
Identity can be verified with a range of valid documents. Making sure you have one of the following documents ready ahead of time will also help to streamline the AML process.
While each of these forms of identification is valid, they don’t cover each and every document that can be used. To find a full list of documents that can legally validate proof of identity, visit the government website.
Verifying a customer’s address is an essential part of the KYC process that must be completed by estate agents before an individual can buy a house. Doing this helps companies to assess the potential risk of a buyer, with addresses linked with suspicious organisations and shell companies being examples of red flags that should be investigated with the necessary enhanced due diligence (EDD) measures.
Documents that can be used for address verification include:
While a proof of funds check won’t be required while you’re in the early stages of house-hunting, it will be required once you put in an offer. Simply put, this check makes sure that an individual has the necessary funds to complete the relevant purchase of the property. Proof of funds checks can be completed by providing any of the following documents:
A source of funds check is often part of the very same process, with this procedure evaluating whether the money has been obtained from a legitimate place. Documents that can be used in a source of funds check include:
Thankfully, if you fail an AML check, the consequences aren’t severe. More often than not, your buying process will be paused and you will simply be asked to provide further information about your identity, address or proof of funds. However, if illicit activity is suspected, a suspicious activity report (SAR) will be filed against you with the NCA and your transaction could be delayed indefinitely.
When estate agents choose SmartSearch, you can be certain that the AML process is as swift and as simple as possible, allowing you to easily progress in the house-buying procedure. By using our robust CDD and source of funds solution, estate agents and property managers can enjoy a smooth process, fulfilling their legal obligation while creating an effortless procedure for their customers.
Want to discover what our platform is like hands-on? Contact us now or book a free demo to discover how we can help!