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There are some factors that need to be considered when dealing with letting agency businesses (LABs) that are unique to this sector.

While the factors below should be considered, they should be read in conjunction with the rest of the LAB guidance in the ECSH55000 chapter.

Exchange rate

All references to the LAB threshold of 10,000 euros includes the equivalent amount in any currency.

For any transactions conducted in sterling or any other currency, LABs will need to calculate the equivalent of 10,000 euros using the London closing exchange rate for the euro and the other relevant currency for the previous working day.

EC-S staff carrying out historical transaction testing, may wish to use the monthly exchange rate published by 188体育, rather than establish the exchange rate on the day of each rental However, if there is a difference of opinion, (for example, if a transaction appears to be in scope but the business hasn鈥檛 treated it as in scope , you will need to establish 听how the business calculated the exchange rate on the day.

Current exchange rates 听can be found at Archived exchange rates can be found .

Combined rental payments

Upfront payment of rent above 10,000 euros, where the actual monthly rent is lower than 10,000 euros, does not fall within scope of letting agency work. The threshold of 10,000 euros only applies to monthly rent.

For example, if a rent is 拢2,000 per month and the letting agent receives the first month鈥檚 rent and 6 months鈥� rent as a deposit at the start, which total 拢14,000. Even though the total value is over the threshold, this is not in scope.

Short-Term rentals and serviced apartments

Short-term rentals, including holiday lets and serviced apartments are within scope of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017). if the rental term is for a month or more and the rental amount is over the 10,000-euro threshold (and things are done in response to instructions received from a prospective landlord or tenant).

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Communal housing and houses of multiple occupancy (HMOs)

Letting agency work can be carried out in respect of a house share, provided that there is a single agreement in place with the total monthly rent meeting the threshold of 10,000 euros.

For example: If multiple tenants are sharing a property on one rental agreement and the total rent is over the threshold of 10,000 euros, and the rest of the definition of letting agency work under regulation 13 MLR 2017 is met, then this would fall in scope of MLR 2017.

If multiple tenants share a property and have individual rental agreements, the individual rent must meet the monthly rent threshold of 10,000 euros in order to fall within the definition of letting agency work. Combined rents from separate agreements for the same shared property are not in scope.

Privately rented properties

A landlord privately renting their own property without the use of a letting agent is not LAB activity within scope of MLR 2017.

Periodic rentals (rolling tenancy)

Under the Housing Act 1988 when a fixed term rental of a residential property comes to an end, and no new rental agreement is put in place, the rental automatically becomes a periodic or rolling tenancy, which is normally monthly.

As there is no new agreement in place and no 鈥榯hings done鈥� in response to instructions received, as per regulation 13 MLR 2017, this is not deemed to be LAB activity. 听This only applies to rental agreements that were done before LABs came into scope.

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Guaranteed rent or rent to rent schemes

Letting agency work can also be done in relation to Guaranteed Rent Schemes, sometimes called Rent to Rent schemes, where a letting agent will guarantee the rent of a property (more detail in ECSH55075), thus requiring supervision under MLR 2017, provided the criteria set out in regulation 13 MLR 2017 is met.

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Commercial businesses renting out their own property

Sole practitioners or businesses letting out their own property can fall within scope of regulations 13(3) and (4) MLR 2017, and thus require registration for supervision.

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

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Joint Ventures

A joint venture is commercial enterprise undertaken jointly by 2 or more businesses, when they come together to form a new business. This new joint venture business would trade independently from the businesses involved.

Within a joint venture it is normal for each business to have an equal say in business matters. It would also be normal for one of the businesses to be the spokesperson on behalf of all the businesses involved in the joint venture.

This activity could be in scope as LAB, as they could be acting on instructions from prospective landlords or tenants.

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

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Turnover Rent

Turnover rents are where a tenant pays a base rent which represents a discounted market rent, plus a top up based on a fixed percentage of the tenant鈥檚 gross turnover for the year.听 Either the base rate, the turnover rate, or total of both, must equate to a monthly rent of 10,000 euros or more for the purpose of letting agency work as set out in regulation 13 MLR 2017.

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Commercial Lease Extensions

Subject to satisfying certain criteria, business tenants have a statutory right under section28 of the Landlord and Tenant Act 1954 to extend the contractual term of their lease.

Many commercial rental agreements are in place for numerous years, sometimes up to 15 or 20 years. When that comes to an end the tenant has the right under the Landlord and Tenant Act 1954 to extend the contract. This new rental agreement will often have the same terms and conditions of the previous rental agreement, but it is a new agreement.

Negotiating lease renewal terms on behalf of business tenants does not include any element of 鈥渟eeking to find.鈥澨� The activity is not done in response to instructions from a prospective tenant 鈥�seeking to find land to rent鈥� as required under the definition as the tenant is already in situ. Neither does it involve a prospective landlord 鈥�seeking to find鈥� a tenant.

This is therefore not LAB activity and is not in scope of MLR 2017.

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