ECSH53025 - Introduction to estate agency businesses
Source: gov.uk (2025-04-23)


Why are estate agency businesses (EABs) supervised?

Property purchases, which an EAB may be involved with, are an attractive method to launder illicit funds due to the large amounts that can be integrated back into the economy as ‘clean’ funds, having disguised the origin of the money used for payment.

Because of the risk of money laundering through property transactions, EABs are included within The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) and previous iterations since 2004. They have been supervised by HMRC since 2014.

For more information on EAB risks see ECSH53125 (https://www.gov.uk/hmrc-internal-manuals/economic-crime-supervision-handbook/ecsh53125).

Customer or client

In the EAB industry, the person buying or selling is often known as the client, which is the same word used in the Estate Agents Act 1979. Under MLR 2017 we use the term customer, when referring to customer due diligence. References to the Estate Agents Act 1979 below in this section will say client, whereas the rest of the EAB pages within the EC-S handbook it will be referred to as customer. These terms can be used interchangeably within the EAB section of the handbook.

Definition under MLR 2017

Estate agent is defined in regulation 13(1) MLR 2017 as “a firm or a sole practitioner, who, or whose employees, carry out estate agency work".

Regulation 13(2) MLR 2017 states that the term “estate agency work” referred to in regulation 13(1) must be read in accordance with Section 1 of the Estate Agents Act 1979 (EAA). This also includes references to disposing of or acquiring an estate or interest in land outside the United Kingdom.

Estate Agents Act (EEA) 1979

Section 1(1) of the EAA 1979 defines estate agency work.

A person will be engaging in estate agency work if, in the course of business, and acting on instructions from a another person (referred to as “the client” in s.1 EAA) who wishes to either buy or sell ‘an interest in land’ , they do both of the following:
- Things done for the purpose of, or with a view to, effecting the introduction of the client and someone who wishes to buy or sell interest in land, and
- Things done after such an introduction has been effected to secure the sale or purchase of the interest in land.
A person is likely to be engaging in estate agency work for the purpose of section 1 of the EAA 1979 if they do any of the following, in the course of a business, on the instructions of a client:
- Traditional high street estate agents.
- Online only estate agents with no physical premises.
- Interacts with people who buy or sell freehold or leasehold interests in land in the UK, including commercial and agricultural properties.
- Send out property details and arrange viewings.
- Offer advice to potential sellers or buyers.
- Deal with enquiries from potential sellers or buyers, which they pass on to their clients.
- Introduce buyers or investors to a “property deal”, also known as property sourcing.
The purchase or sale of an interest in land without the use of a third-party, for instance property builders selling their own stock of land or property directly to buyers, does not fall within the definition of estate agency work.

A person can still carry out estate agency work for the purpose of section 1 of the EAA, even if:
- They don't have physical premises.
- They carry out estate agency work entirely online.
Work under the Estate Agents Act 1979

The following will not constitute estate agency work for the purpose of s.1 EAA 1979, provided that the person does nothing else covered by the definition in s.1:
- The publication of advertisements or giving out information. e.g. newspapers.
- An intermediary such as an internet portal for sales, which merely provides a platform for sellers to advertise their properties and provide a means for sellers and buyers to contact and communicate with each other. This includes companies such as Rightmove and Zoopla, as they only advertise, but only if they do not carry out other estate agency work.
- Work done by solicitors or their employees in England and Wales as part of their work as solicitors.
- Solicitors’ property centres in Scotland, but only if they are supervised for AML by the Law Society of Scotland. This is when an estate agent works within a solicitor’s office and in essence are the same business and are supervised by the Law Society of Scotland and not HMRC.
- Work done in the course of carrying out any survey or valuation pursuant to a contract which is separate from other estate agency work.
- Work connected to planning applications and matters covered by the Town and Country planning legislation.
- Estate agency work carried out entirely outside of, and with no connection to, the UK.
- Work done in the course of arranging mortgages.
- Property management work is not listed as an exemption to EAB activity but is also not in scope as an EAB.
Exclusions

The preparation of a home report by a business in Scotland (under section 98, 99(1) or 101(2) of the Housing (Scotland) Act 2006) is excluded as EAB activity under regulation 15(1)(g) MLR 2017.

This exclusion only relates to the preparation of a home report and does not extend to any other EAB activity the business may be doing.

Group structures

A business that is within a group structure could be acting as an EAB. This will depend on how the group is set up. A group may trade under one structure and, for instance, just have one VAT number and have business records for the whole group. A group could also have lots of separate businesses within the group that trade separately, and each separate business has their own VAT number and business records.

If within a group structure one business owns the property, and another business in the group sells the property, that would be seen as acting on instructions from a third party. This is EAB activity.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)