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The Fifth Money Laundering Directive (5MLD) takes effect in the UK on the 10th January 2020. 5MLD will make changes to the UK anti money laundering regime and will bring letting agents within the scope of the Money Laundering Regulations for the first time. This means that letting agents will be required to assess certain tenancy agreements for their potential to be used as a mechanism to clean up the proceeds of crime.
All tenancy agreements with a rent in excess of €10,000 per calendar month will be caught by the regulations. This means that lettings agents will be required to carry out “know your customer” checks on landlords and tenants. “Know Your Customer” will mean ID checks, verification that the tenancy is genuine and not set up to assist either the landlord or tenant to clean up the proceeds of crime. Tenancies that fall within the scope of the regulations will require on-going monitoring to check the initial conclusions regarding the money-laundering risk remain relevant. Landlords and tenants who fall into this category of tenancy should therefore prepare for more questions and administration.
More information on the Fifth Money Laundering Directive can be found on the .GOV website
If you have any questions regarding this legislation change or would just like to talk to one of our local lettings experts, book a free lettings review at one of our branches.
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