THE 3️⃣ PILLARS OF COMPLIANT SOURCING and the ⚠️🚩 red flag Indicators to look for ⬇️ Property sourcing has a terrible reputation - and often for good reason. Most sourcers operate without critical compliance measures, putting themselves and their clients at risk. The three pillars of compliant property sourcing are non-negotiable: 1️⃣ Data Protection Compliance (ICO Registration). ➡️ Every sourcer handles sensitive personal and financial information. ➡️ Without proper data protection measures, both you and your clients are exposed. ➡️ The ICO registration is a legal requirement for handling client data. 🚩⚠️ RED FLAG INDICATORS No soucer or agency is permitted to display the ICO badge as the agency is supervised by, not associated with the ICO. If they are, they don't know compliance. 2️⃣ Anti-Money Laundering Registration (HMRC). ➡️ Property is unfortunately a common vehicle for money laundering. ➡️HMRC requires all sourcers to register and conduct proper due diligence. ➡️This protects investors from unwittingly buying properties with criminal connections. 🚩⚠️ RED FLAG INDICATORS No sourcer or agency is permitted to display the HMRC logo as the agency is supervised by, not associated with the ICO. If they do, they don't know compliance. 3️⃣ Professional Membership, Systems & Documentation. ➡️ Membership to a redress scheme such as The Property Ombudsman is a requirement for agents (sourcers, estate or lettings) ➡️ Without proper client journey mapping, contracts, and business processes, sourcers create confusion and risk. ➡️ We maintain comprehensive documentation that stands up to scrutiny. 🚩⚠️ RED FLAG INDICATORS No sourcer or agency is should be trading without displaying a redress scheme and membership number. They should also present a clear client (buyer or seller) process of how they operate. If they don't, they don't know compliance. ⚠️ These pillars aren't just about checking boxes - they're about building a professional business. ⚠️ Working with non-compliant sourcers can lead to financial penalties and criminal investigation. ⚠️ Your data security and financial safety are at risk with amateur sourcers. ➡️ Before engaging any property sourcer, verify their ICO registration number and HMRC AML registration. ➡️ Ideally, they should also be registered with NAPSA (National Association of Professional Sourcing Agents) having previously conducted Professional Property Sourcing Compliance. ⚠️ Professional compliance isn't expensive - but the lack of it certainly can be. Want to work with a fully compliant property sourcing business? DM the word VIP.

Posted by James Lovell-Smith at 2025-03-31 06:56:38 UTC