Estate agents act
Under the provisions of the estate agents act 1979 and the estate agents (accounts) regulations 1981, accounts involving clients' moneys must be examined and reported on by a qualified auditor. See the summary at the Office of Fair Trading.
This is one of a series of instances where legislation seems to require a full audit or at least an auditor's report, even though the client would for other purposes (for example, annual examination of accounts for businesses under the audit threshold) or in other circumstances be permitted to elect not to have an audit.
CIMA members are therefore unable to provide accountants' reports in such circumstances, even if they have been responsible for examining a client's accounts.
See the Office of Fair Trading's full estate agency guide (PDF 236KB) which provides more detailed information about activities related to estate agency work.
Consumer credit lenders engaged in estate agency work
Under the money laundering regulations 2007, certain businesses are required to be supervised by the Office of Fair Trading rather than by CIMA or another supervisory authority. These businesses are those which are:
- engaged in estate agency work
- consumer credit lenders not authorised by the Financial Services Authority or supervised by HM Revenue and Customs as a money services business.
Registration with the OFT will involve completing a registration form and paying a fee. The scheme will be launched on 31 July 2009 and businesses the OFT are to supervise must be on the OFT register within six months of the start of registration; that is by the end of January 2010.
After the initial registration period all new OFT supervised businesses must register before carrying on a relevant business. From 31 January 2010 it will be an offence for a business to carry on its business without being registered. Failure to register could lead to the OFT imposing a civil penalty or taking a prosecution if business is carried on after that date. Prosecution could result in a sentence of up to two years in prison and/or an unlimited fine.
The OFT recognises the difficult circumstances in which businesses are currently trading, but our AML supervisory work has to be self-funding. The OFT's fees for 2009/10 (to be paid for registration) have been set at £115 per business premises and is capped at 20 premises. £115 is also the minimum fee for those businesses without premises.
The registration form and further information are available at: www.oft.gov.uk/mlr.