AML checks an estate agent needs before marketing

HMRC registration has to be in place before an agent can lawfully take a listing, and due diligence on the seller is due at that point too, not once a buyer appears.

8 min readLast verified: 2026-09-07

AML checks an estate agent needs before marketing

An estate agency business must be registered with HMRC for anti-money laundering supervision before it carries out any estate agency work at all, and HMRC's own guidance describes registration as taking up to 45 days, so it is not something to start once an instruction is already agreed. Separately, customer due diligence on the seller has to be completed when the business relationship with them is formed, which HMRC's guidance places at the point of marketing the property, not once an offer arrives. Due diligence on a buyer only becomes a live obligation once the seller accepts their offer, and must be finished before contracts exchange.

Does an agent need to register with HMRC before it can take on clients at all?

Yes, and this is the part that is easy to treat as paperwork rather than a precondition. The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 place estate agency work and letting agency work into the regulated sector, and HMRC's own published guidance is direct about the consequence: a business must not carry on as a relevant business until it has applied to register with HMRC. Registration is not a formality that runs alongside trading, it is a condition of trading lawfully at all, and a firm that starts marketing property before it is registered is operating outside the Regulations from its first listing, whatever the quality of its due diligence once it does check a client. HMRC's guidance states that a new registration application can take up to 45 days, and longer if HMRC needs more information, payment or an update to the application, which makes this a lead time to plan around rather than a same day step, particularly for a business setting up for the first time or bringing a new branch into scope.

Letting agency work is only caught where the letting is for a month or more and the rent is, for at least part of the term, equivalent to a threshold rent a month or more. That threshold was set in euros when the requirement was introduced in 2020, but the regulation was amended with effect from 30 June 2026 to fix it in sterling instead, at 10,000 pounds a month, which removes the need to track a monthly conversion rate that HMRC previously published for this purpose. A business relying on older guidance that still describes the threshold in euros should check the current figure rather than assume the conversion still applies.

When does due diligence on the seller actually have to happen?

This is the detail most agents get backward, because the instinct is to think of anti-money laundering checks as something done on whoever is bringing the money, meaning the buyer. HMRC's guidance is explicit that the seller is normally the customer for these purposes, and that an estate agency business enters into a business relationship with a seller, and so must complete due diligence on them, usually at the point of marketing the property. Waiting until an offer is accepted to check the seller's identity, meaning waiting until the buyer's due diligence obligation also arises, misses the point at which the seller side obligation was already due. A firm that takes an instruction, agrees terms and puts a listing live without having verified who the seller actually is has already missed the trigger point the Regulations set for that half of the transaction, regardless of what happens later with the buyer.

When does due diligence on the buyer become required?

Only once the seller has accepted the buyer's offer. HMRC's guidance treats the moment of acceptance as the point a business relationship forms with the buyer, who is described as the counterparty rather than the agent's own customer, and states that a firm does not need to carry out due diligence on someone who is merely making enquiries, requesting details, or asking about a property, since contact of that kind may never lead anywhere and sits well before an offer being accepted. For an estate agent specifically, HMRC's guidance treats the formal acceptance of an offer as happening at exchange of contracts, which means due diligence on a buyer must be completed and finished before a binding contract is entered into, whether that is exchange itself, another form of binding agreement, or the opening of a sealed bid that creates one. Where events do not create a binding contract in the usual way, the guidance still requires due diligence to be complete before the point at which the sale becomes irrevocable. A practical trigger many firms use is the point terms are agreed and a memorandum of sale is signed by everyone involved, well ahead of exchange itself, precisely so the check is not left to the last few days before completion.

What if an agent genuinely does not know who the final buyer is until late?

HMRC's guidance allows for this without treating it as a compliance failure automatically. Where a vendor finds a buyer independently, or through another agency, and the original agent is excluded from that part of the process, the guidance says a business that was never made aware of the offer can be treated as having taken all reasonable steps, provided its contract with the seller already required the seller to pass on the buyer's details, and any changes to them, in time for due diligence to be carried out before exchange. The same principle applies where the buyer changes late without the agent's knowledge. What the guidance does not allow is silence as a strategy, meaning a firm cannot rely on genuinely not knowing if its own contract with the seller never asked to be told in the first place.

What does registration and due diligence actually protect against, and what happens if it is skipped?

The Regulations exist because an estate agency business sits close to two of the more common routes for laundering money through property, using the proceeds of crime to buy an asset that can later be sold on with a clean history, and structuring a purchase through complex ownership to obscure who actually controls it. Breach of the Regulations can lead to a civil penalty or criminal prosecution, and the Regulations themselves set penalties on conviction on indictment of a fine, imprisonment for up to 2 years, or both. HMRC is the supervisory authority responsible for monitoring compliance in this sector and can use the same regime to gather information for tax purposes as well as anti-money laundering purposes, which is a reason a firm should not treat a request for records as unrelated to its usual tax position.

Trigger point	Whose due diligence is due	When it must be complete
Point of marketing the property	The seller or landlord	Before the business relationship is entered into, in practice before marketing begins
Buyer or tenant makes an enquiry	Nobody yet	Not required, this is not a business relationship
Seller accepts an offer	The buyer, treated as a counterparty	Before exchange of contracts or another binding agreement
Tenant's offer is accepted	The tenant, and any guarantor	Before the tenancy agreement is signed

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Frequently asked questions

Can a firm start marketing while its HMRC registration is still being processed?

HMRC's guidance is that a business must not carry on as a relevant business, which includes estate agency and letting agency work, until it has applied to register, and the safer reading is to treat an application in progress as not yet meeting the duty to be registered rather than as sufficient on its own. Given HMRC states an application can take up to 45 days, this needs to be built into a launch timeline rather than treated as something that can be sorted after the first listing goes live.

Does an agent need to check a seller's identity again for every new instruction, even a returning client?

Yes. HMRC's guidance says due diligence must be carried out on all customers even where the business already knew them before they became a customer for this instruction, because the requirement is being able to demonstrate current knowledge of who a client is, not relying on a historic relationship.

What counts as the seller for due diligence purposes if the property is being sold by a lender after repossession?

HMRC's guidance treats the lender as the customer in that situation rather than the previous owner, since it is the lender that has formed the business relationship with the agent for the purposes of the sale.

Is a buying agent or property finder subject to the same rules?

A business relationship with a buying agent's own client is formed when that client instructs them, so due diligence on that client must be completed before that point, which is earlier than the exchange based trigger that applies to an estate agent acting for a seller.

How does this interact with the fee an agent charges being advertised correctly?

They are separate duties enforced by different regimes, registration and due diligence under the Money Laundering Regulations, and fee transparency under general consumer law, but both bite before or at the point a firm starts working with a client, which is covered in estate agent fee transparency rules in the UK. The point at which a listing's status must change once an offer is accepted, which is the same moment due diligence on a buyer becomes due, is covered in under offer vs sold STC on a UK listing.

Sources

Last verified: 2026-09-07