At Doormarked we take compliance very seriously. Anyone working within the UK property industry is required to follow Government Regulations & national trading standards…. If they do this they are considered to be compliant.
Recently, we’ve discovered issues with “compliance packages” being mis-sold to property professionals. As a 3rd party which checks the compliance of any independent property advisor (IPA) we know exactly what is needed for a property professional to be considered compliant. We want to share what we’ve discovered to stop anyone else making this mistake…
What's needed to be compliant?
Depending on what strategies & services a property professional uses within the UK property industry will determine what things they do or don’t need to be compliant. These may include:
- Membership of a Redress Scheme
- ICO Registration
- Registration with HMRC for Anti-Money Laundering (AML)
- Appropriate insurance(s)
- Client Money Protection (CMP)
- Tenancy Deposit Protection (TDP) Scheme
For a property professional to be compliant in the strategies & services they use, they will need to demonstrate they have any appropriate memberships or registrations with certain organisations AND they will also need to be conducting their business inline with any requirements set out by these organisations.
What's the problem?
Recently, we have become aware that within the industry some property professionals who offer a particular service (property sourcing or deal sourcing) are purchasing “compliance packages” which enable them to quickly meet the necessary compliance requirements through a 3rd party. This saves them paperwork & time. Some companies selling these compliance packages also suggest that they are cheaper than if you were to organise all the above requirements yourself. Is this too good to be true?
It depends….
What we have noticed is that some companies selling “compliance packages” are trying to share the same set of compliance details (often their own) to multiple different property professionals. A property professional is NOT compliant if their company or the company they are working for is not directly registered with any necessary memberships or organisations. If a property professional has purchased a compliance package where they are sharing the compliance requirements of another company in this way, then sadly no matter how much they have paid for that compliance package, that property professional is still NOT compliant.
Let us explain...
If a property professional is working for a company (either their own or another person’s), the company they work for will need to be registered on Companies House. It is that company that needs to be associated with any necessary compliance requirements. It is NOT legally allowed for that company to be using another company’s registration details.
For example…
Let’s imagine you’re employing a property sourcer called John who is the Director of his company “John’s Sourcing Services”. If John is collecting customer’s personal information on behalf of his company, it is his company “John’s Sourcing Services” that will need to be registered with the ICO. If a customer wanted to check that John’s business was registered they would be able to see John’s company registered on the ICO website. The same applies to HMRC AML & Redress Scheme Membership.
If John has bought a compliance package, that compliance package should provide him with an ICO registration number, Redress Scheme Membership & HMRC AML registration details that are specific to the company he is working for (i.e. his own company). Such that when those membership details are checked by a user, John’s own company “John’s Sourcing Services” would appear (as described above). However, if John’s compliance package provides details that when searched list another company e.g. “Perfect Property” this means that John’s own company is not registered. In order to be considered compliant, John would have to be working for “Perfect Property” instead of his own company.
Sadly, this misuse of “compliance packages” has repercussions on the whole industry for both individuals working within the industry and their customers. It has resulted in property professionals spending significant amounts of money on “compliance packages” which haven’t made their company compliant. They are then misinformed & advertising their work to their customers as being compliant, when they actually aren’t & don’t have the necessary registrations or memberships which are needed to protect themselves or their customers.
What can we do about this?
At Doormarked, we take steps to verify any independent property advisor (IPA) advertising their work on Doormarked. As part of this verification process we complete thorough checks to ensure that an IPA is compliant. It is through these checks that we have been made aware of these scenarios where property professionals are unknowingly being sold a non-compliant “compliance package”.
We will continue doing what we can to ensure that any property professional joining Doormarked as an independent property advisor (IPA) is correctly listed as either compliant or non-compliant. However, we can’t account for the rest of the industry or other companies/platforms completing compliance checks.
We always advise that anyone does their own due diligence but we want to encourage all our customers (both our users & independent property advisors) to take extra consideration if working with individuals outside of Doormarked. Just because someone says they are compliant doesn’t necessarily mean they are…
Lastly, anyone who has already purchased a compliance package should check that they have been provided with registration & membership details that are specific to their business or the business they are working for. If these details are not directly related to the business they are working for then they are not compliant.
Our team is always at hand to answer any questions you may have about compliance. Please don’t hesitate to email us at contactus@doormarked.com.
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