How Long do Estate Agents and Solicitors Need to Keep Proof of Funds?

Navigating the requirements for retaining proof of funds information is crucial for both estate agents and solicitors in England and Wales. This information not only supports compliance with money laundering regulations but also ensures that property transactions are conducted transparently and legally. Here’s an overview of what you need to know regarding the retention periods for these crucial documents.

Regulatory Requirements

The retention of proof of funds documents is primarily governed by money laundering regulations. The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 set the framework for how financial records should be maintained.

What Records Must Be Retained?

Estate agents and solicitors must retain records that include identification documents, transaction details and verification documents related to the source of a client’s funds. These records help in verifying that funds being used in transactions are legitimate, helping to prevent fraudulent or illegal financial activities.

How Long Must Records Be Kept?

Under current regulations, estate agents and solicitors are required to retain these documents for a period of at least five years following the end of a business relationship or the completion of a transaction. The Property Ombudsman recommends a period of six years for Estate Agents and the Law Society, twelve years for Solicitors. This means that even after the sale or purchase is finalised and business concludes, the records should still be accessible for this duration.

Importance of Compliance

Failing to comply with these retention obligations can have significant legal repercussions. Non-compliance can lead to penalties, including fines and reputational damage, which can impact future business operations. For this reason, it is imperative that both estate agents and solicitors have robust processes in place for record-keeping and document management.

Best Practices for Record Retention

– Digital Record-Keeping: Transitioning to digital platforms can simplify the management and retrieval of documents. Always ensure that documents are encrypted and safely stored.

– Regular Audits: Conduct periodic audits to ensure that all necessary documents are retained and organised effectively.

– Staff Training: Ensure all members of the team understand the importance of compliance and are trained in the proper handling of documents.

Conclusion

The mandate to retain proof of funds information for at least five years serves as a protective measure against money laundering and fraud. By adhering to these requirements, estate agents and solicitors not only comply with the law but also enhance the trust and integrity of property transactions. Implementing robust record-keeping practices will ensure that when scrutiny arises, they are well-prepared and compliant with all regulatory obligations.

Understanding and implementing these requirements are essential for maintaining compliance and fostering trust within the property market. Whether an estate agent or solicitor, ensuring the processes align with legal obligations helps to support our professional integrity and client relationships.

If you are looking for a first rate conveyancing service why not give one of Alexander JLO’s specialist property lawyers a call on 020 7537 7000, click here or email quote@london-law.co.uk for a free, no-obligation quotation? Come and see what we can do for you.

This blog was prepared by Alexander JLO’s property partner Matt Johnson on 30th April 2025 and is correct at the date of publication. Matt has many years of experience of dealing with property work and specialises in new build and shared ownership properties throughout England and Wales.  His profile on the independent Review Solicitor website and be found Here