Propertymark / NAEA Qualification (Level 3 Estate Agency) Legal Framework Governing Residential Estate Agency Flashcards

24 sample cards from the Legal Framework Governing Residential Estate Agency deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. How does the MLR 2017 (as amended) treat DOMESTIC PEPs differently from foreign PEPs?

   Domestic PEPs (and their family/associates) are generally to be treated as lower risk than foreign PEPs, unless other risk factors are present. EDD is still required for both, but the extent of enhanced measures should be proportionate to the (typically lower) risk of a domestic PEP.

2. What is sanctions screening, and which UK regime governs it?

   Sanctions screening is checking customers/parties against financial sanctions lists to ensure no dealings with designated persons. In the UK it is governed by the Sanctions and Anti-Money Laundering Act 2018 and enforced by OFSI (Office of Financial Sanctions Implementation); the consolidated list of designated persons must be checked.

3. What must an agent do if a customer matches a name on the UK financial sanctions list?

   The agent must not provide funds or economic resources to, or deal with assets of, the designated person; must freeze any relevant assets; and must report the match to OFSI. Breaching financial sanctions is a strict-liability offence regardless of whether money laundering is suspected.

4. What is the role of the Nominated Officer (MLRO) in an estate agency business?

   The Nominated Officer / Money Laundering Reporting Officer receives internal suspicion reports from staff, evaluates them, decides whether to submit a SAR to the NCA, makes DAML requests, oversees AML policies/training, and is the firm's central point for AML compliance. Larger firms may also appoint a board-level officer responsible for compliance.

5. What record-keeping retention period does the MLR 2017 require for CDD and transaction records?

   Records of customer due diligence and supporting transaction evidence must be retained for 5 years from the end of the business relationship or the completion of the occasional transaction. After this period, personal data must generally be deleted unless another legal basis or consent applies.

6. What must a firm's written AML risk assessment and policies cover under MLR 2017?

   A firm must maintain a documented risk assessment (considering customers, countries, products/services, transactions, delivery channels) and written policies, controls and procedures — including CDD, ongoing monitoring, reporting, record keeping, internal controls, risk management, and staff training/screening — kept up to date and approved by senior management.

7. What is mandatory redress scheme membership for estate agents, and which law requires it?

   Under the Consumers, Estate Agents and Redress Act 2007 (and subsequent orders), estate agents dealing with residential property must belong to a government-approved redress scheme, giving consumers access to independent complaint resolution and possible compensation. Membership is a legal requirement to trade.

8. Name the government-approved redress schemes that residential estate/letting agents must join.

   The Property Ombudsman (TPO) and the Property Redress Scheme (PRS). Agents must belong to one of these approved schemes; failure to register can result in a penalty (up to £5,000) issued by the local weights and measures authority / NTSELAT.

9. What is the National Trading Standards Estate and Letting Agency Team (NTSELAT), and what are its powers?

   NTSELAT (based at Powys County Council / National Trading Standards) is the lead enforcement authority for estate agency legislation. It can issue prohibition and warning orders under the EAA 1979, oversee redress scheme and material information compliance, maintain a banned list, and issue guidance on disclosure obligations.

10. What guidance has NTSELAT issued regarding 'material information' in property listings (Parts A, B, C)?

    NTSELAT guidance (in partnership with portals) requires material information in listings: Part A — price and council tax band/rates, and tenure; Part B — utilities and similar (e.g. electricity, water, heating, broadband, parking); Part C — anything that may affect a transactional decision (e.g. flood risk, restrictions, building safety). Omission can breach the CPRs.

11. What are Propertymark's Codes of Practice and Conduct?

    Propertymark (incorporating NAEA) Codes of Practice set the professional standards binding on member agents — covering honesty, transparency, conflicts of interest, handling clients' money, client accounting, professional indemnity insurance, and compliance with the law. Breaches can lead to disciplinary action by Propertymark's Conduct and Membership Committee.

12. What does Propertymark require of members regarding clients' money protection (CMP)?

    Propertymark member firms holding clients' money must belong to a Client Money Protection scheme, keep client money in a separate designated client account, reconcile accounts regularly, and hold professional indemnity insurance. CMP is also a statutory requirement for letting agents in England.

13. What is the purpose of an AML and data audit (compliance audit) in an estate agency?

    An AML/data audit independently tests whether the firm's AML controls and data-protection practices work in practice — reviewing CDD files, SAR records, training logs, the risk assessment, retention/deletion, and consent records. MLR 2017 requires an independent audit function where appropriate to the size and nature of the business.

14. What are the six data protection principles under the UK GDPR?

    Personal data must be: (1) processed lawfully, fairly and transparently; (2) collected for specified, explicit and legitimate purposes (purpose limitation); (3) adequate, relevant and limited to what is necessary (data minimisation); (4) accurate and kept up to date; (5) kept no longer than necessary (storage limitation); (6) processed securely (integrity and confidentiality). A 7th overarching principle is accountability.

15. What are the lawful bases for processing personal data under UK GDPR (Article 6)?

    Consent; contract; legal obligation; vital interests; public task; and legitimate interests. An estate agency typically relies on contract (to perform the agency agreement), legal obligation (AML checks), and legitimate interests (some marketing), with consent for direct electronic marketing.

16. What is the relationship between the UK GDPR and the Data Protection Act 2018?

    The UK GDPR is the retained EU regulation forming the core data protection framework; the Data Protection Act 2018 supplements and tailors it for the UK — setting out exemptions, special category processing conditions, law-enforcement and intelligence processing, and the powers of the Information Commissioner's Office (ICO).

17. What rights do individuals have under the UK GDPR?

    The right to be informed; of access (SAR); to rectification; to erasure ('right to be forgotten'); to restrict processing; to data portability; to object; and rights related to automated decision-making and profiling. A data subject access request must normally be answered within one month, free of charge.

18. What is the purpose of the Privacy and Electronic Communications Regulations (PECR)?

    PECR governs electronic marketing communications and privacy in electronic communications — covering marketing calls, emails, texts, faxes, the use of cookies and similar technologies, and security of communications services. It sits alongside the UK GDPR and applies specific rules to direct electronic marketing.

19. Under PECR, what is the rule for sending marketing emails/texts to individuals?

    Marketing by electronic mail to individuals generally requires prior consent (opt-in). The exception is the 'soft opt-in': where contact details were obtained during a sale (or negotiations) of a similar product/service, the same business may market similar products, provided the person was given a simple opt-out at collection and in every message.

20. Under PECR, what consent rules apply to non-essential cookies?

    Non-essential cookies (e.g. analytics, advertising) require the user's informed consent before being set, with clear information about their purpose. Strictly necessary cookies (essential to provide a service the user requested) are exempt from the consent requirement.

21. What is the time limit and threshold for reporting a personal data breach to the ICO?

    A personal data breach that is likely to result in a risk to individuals' rights and freedoms must be reported to the ICO without undue delay and not later than 72 hours after becoming aware of it. If reported late, the controller must give reasons for the delay. Breaches posing no such risk need not be reported but must be documented.

22. When must a data controller notify affected individuals (data subjects) of a personal data breach?

    When the breach is likely to result in a HIGH risk to the rights and freedoms of individuals, the controller must inform the affected data subjects without undue delay, in clear and plain language, describing the breach and offering mitigation advice.

23. What is the maximum administrative fine under the UK GDPR / Data Protection Act 2018?

    The higher tier maximum is £17.5 million or 4% of total annual worldwide turnover, whichever is greater. The standard (lower) tier maximum is £8.7 million or 2% of worldwide annual turnover, whichever is greater. The ICO enforces these penalties.

24. What must an estate agency consider for data retention, security and consent in marketing — summarised together?

    Retention: keep personal data only as long as needed (e.g. AML records 5 years; otherwise per a retention schedule), then securely delete. Security: apply appropriate technical and organisational measures (encryption, access controls, staff training). Marketing consent: obtain valid opt-in (or soft opt-in) under PECR, record it, and provide an easy opt-out in every communication.

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Legal Framework Governing Residential Estate Agency flashcards FAQ