Property agents run into difficulty over enhanced anti-money laundering rules

Compliance deadline pushed to December from July following industry feedback: CEA

- Joyce Lim Senior Correspondent and Isabelle Liew

Property agents have been given more time to familiarise themselves with new rules to combat money laundering following industry feedback to the Council for Estate Agencies (CEA).

Agents and property agencies ‘were supposed to perform stricter due diligence checks from July 1, when changes kicked in for the Estate Agents Act and its subsidiary legislation, the Estate Agents (Prevention of Money Laundering, Proliferation Financing and Terrorism Financing) Regulations.

The deadline has been extended to Dec 31 following industry feedback, CEA said in response to queries from The Sunday Times.

Before the revised regulations, property agents and agencies were required only to conduct due diligence measures on their own clients.

The enhanced framework expands checks beyond an agent’s own client to include unrepresented parties in a deal, such as a direct buyer when the agent represents the seller. The CEA said the changes align with international standards set by the Financial Action Task Force.

Property agents must also verify the source of funds used to buy or rent a private property, identify ultimate beneficial owners when entities are involved, and keep fuller records.

The changes also require agents to guard against proliferation financing - the provision of funds for the illicit development and supply of weapons of mass destruction and related materials.

Property agencies said they support the policy intent, but agents had reported challenges in applying the new procedures in everyday deals.

The most cited pain point was collecting sensitive information such as source of funds, particularly from people they do not represent.

Mr Eddie Lim, chief agency officer of real estate company PropNex Realty, described it as a “compliance gap”, as the new rules legally oblige agents to obtain documents from parties who are “neither contractually nor relationally bound to respond”.