Don't Trust Us, Trust the Law
Somebody has probably told you that you don't need to be compliant to source property. Here's how to find out who's right — without taking anyone's word for it, including ours.
I know a lot of you have heard the claim. You don't need to be compliant to source or deal package. It's just another course being sold to you. It's all unnecessary.
Our members already know better. But a good chunk of this sector still believes it, and I don't want anybody simply taking my word over anyone else's — not even NAPSA's, and we're the recognised trade body. What we want is for you to go and look for yourself.
So this week's mini session was about exactly that. Where to check. Where to read. All of it free.
"It's just your opinion, Tina"
Fair enough. The definition in the Estate Agents Act 1979 is genuinely open to interpretation, and my reading of it is one view. It happens to be a view built on thirteen years of study and working closely with the supervisory bodies for this sector — but it's still my view.
So let's not use my view.
HMRC has been rebuilding its anti-money laundering guidance for the agents it supervises. We've seen it ahead of launch, because we gave feedback on the early drafts. It's clearer than the old version and a good deal easier to read. When it lands, that's the first document I'd send you to.
What matters is the list inside it: the activities that make you an estate agency business in law. Read it properly and ask yourself honestly how many of those lines describe what a sourcer or deal packager actually does day to day. Introducing investors to deals. Sending property details. Arranging viewings. Advising buyers or sellers. Acting as the go-between. Buying direct from an owner to sell on.
That list isn't written by me. And there's now a whole section in the guidance that never existed before, covering sourcing agents, deal finders, investment brokers and relocation agents. We're going through that one in detail with members.
The cost of believing the easier story
Registration failures are where most agents come unstuck, and HMRC publishes the results. We went through those published lists ourselves and pulled out the sourcers, deal packagers and investment brokers — 136 of them, fined just over £1.1 million between them, with individual penalties running into tens of thousands of pounds.
That's our research, not our opinion. Every one of those names came off a list HMRC published, and you can go and read them yourself.
Four places to check anybody
If you're an investor, you can verify any sourcing agent in about fifteen minutes:
1. A redress scheme. The Property Ombudsman or Property Redress. Search either directory using the company name or any registration number they've given you. They need one, not both.
2. The ICO register. They're holding your personal data, so they should be registered for data protection.
3. The HMRC AML supervised business register. Fair warning — it isn't a live search. You download a spreadsheet and look through it yourself.
4. Companies House. If they're a limited company, they're on there, and so are their accounts and their filing history.
And our own member directory is free to search by area and strategy. Every approved member is checked and monitored against the minimum standards required if you meet the Estate Agents Act 1979. This means, they have met steps 1-3 above, plus everything else required to not only protect themselves, but you the investor.
Four registers, one directory, no cost - all to gain that peace of mind.
This isn't about paperwork
Our sector has a reputation. Cowboys. Wild West. For good reason, frankly — too many large, non-refundable fees taken up front, and too many investors left with nothing when it goes wrong. And remember, as an investor you're a business, not a consumer. Nobody is coming to rescue you from an agreement you signed, so read them properly and be picky about what's in them.
For sourcers, being able to prove you're professional is what gets you the right investors and the long-term relationships that actually build a business. The alternative is complaints, redress claims, and your name doing the rounds on social media - which is draining, and very hard to undo.
An understanding of the money laundering regulations and the risks they carry in property transactions; not just for you, but for the buyer and the seller — puts you head and shoulders above the noise. A country mile above it, if I'm honest.
So here's the question I'd leave you with. What do you want your business to be known for? A quick buck and a disappearing act, or a service investors are happy to recommend?
Watch the full session above. Then go and check. Don't trust us. Trust the law.
Best wishes, Tina - CEO of NAPSA
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Compliance Over Coffee is live every Tuesday with Tina Walsh at 10am on YouTube, LinkedIn and Facebook. Bring your own mug.
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Frequently asked questions
Do property sourcers need to be registered with HMRC?
If your business introduces buyers or investors to property deals, HMRC's own guidance treats that as estate agency work — which means registration for anti-money laundering supervision before you start trading, not after. Trading unregistered is where the overwhelming majority of penalties come from, and it's a criminal offence, so if you're unsure, the honest answer is to go and read the guidance rather than take anyone's assurance that you're fine.
How can an investor check a property sourcing agent?
Four free public registers will tell you almost everything you need: a redress scheme directory (TPO or Property Redress), the ICO register for data protection, the HMRC AML supervised business register, and Companies House. It takes about fifteen minutes, costs nothing, and you can run it on anyone — including an agent who tells you none of it applies to them.
What happens if a sourcing agent isn't registered?
HMRC issues financial penalties and publishes the names, and our own research found 136 sourcers, deal packagers and investment brokers fined just over £1.1 million between them. Some of those companies no longer exist.
