Would you like to learn how to source property deals and be legally compliant right from the start ?
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So, you want to set up a property sourcing business?
Have you thought about the legal aspects of doing so and the fact that you have to remain compliant in order to stay on the right side of the law? When you set up your property sourcing business, you should ensure that it is set up legally and compliantly. If you fail to get this right then the consequences could be severe for both your business and you as an individual. Therefore, before you begin to source properties, you should use the services of a property sourcing coach in order to ensure that you have followed the correct legal steps. So how can you source properties to sell on and remain legal?
The initial set up
If you are only purchasing properties for yourself, instead of selling them on, you won’t need to set up a sourcing business. To begin with, your property sourcing coach will be able to help you determine whether your current business is actually a compliant property sourcing business. However, if you are classed as a sourcing business, then you do need to make sure that all the correct legal requirements are in place, and this is where you will need to determine whether you are going to set up as a limited company, sole trader or an LLP.
Property transactions and the property industry as a whole are heavily regulated, with the aim of protecting all parties involved in the process. When it comes to governance all property deal sourcing is classified under the same category as any estate agency type business and so, it is important that you adhere to the same rules.
There are two ombudsman schemes that oversee the property industry and all are independent bodies where your clients can submit complaints. There are many reasons why a client would choose to go to the ombudsman, such as the way in which you deal with a complaint. And so, in terms of escalation, the ombudsman is the next stage of the process. The two ombudsman schemes are known as the The Property Ombudsman (TPO) and the Property Redress Scheme (PRS). It is vital that property sourcers are members of one of these schemes.
Anti Money Laundering Legislation – Make Sure you Register
Property is used is often used by criminals to launder money and your property sourcing coach will be able to provide you with the information required to help you cover and protect yourself in this area. Your property sourcing business will need to be registered with HMRC for Anti Money Laundering supervision. For you, amongst other things, this means that if you have any suspicions relating to client activities, you will be expected to report them. If you fail to do so, you could face hefty fines. I see so many Property Sourcing Coaches say that non of this is needed, and it's simply bad advice. You DO need to adhere to the regulations.
Insurance is there to protect you from problems such as a client taking you to task over a perceived failure in your professional service. In the property industry, people are spending large sums of money and so, this is more common than you might realise. If you put the correct insurances in place, you will be protected from claims such as these.
It is a requirement that you have professional indemnity insurance and advisable to also include public liability insurance, both will ensure that you are covered adequately.
Data Protection Act
The General Data Protection Regulation (GDPR) are quite prominent at the moment and make you responsible for the way in which you hold personal data. relating to sellers, buyers as well as any other general contacts. When you start handling this data, you will need to register for Data Protection supervision, this is done with the Information Commissioners Office (ICO). You will have to follow the six principles to remain GDPR compliant and ensure that you handle and store data safely, responsibly and transparently.
Regulations and laws in the property industry are intricate and can be overwhelming, but if you fail to comply with them, you could find yourself in a spot of bother, that could cost you significantly. Using a property sourcing coach will set you along the right path, ensuring that you are operating in a legal way and my well save you from facing a heavy fine or even worse a ‘spell behind bars’.
If you're looking for a Property Sourcing Coach who can provide you with help with your Property Sourcing Business, as well as making sure you are Property Sourcing Compliant, then make contact and let's speak.
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