Yes, a Deal Sourcer must be compliant with specific regulations, especially in the UK. Since sourcing property deals is considered a form of estate agency work, deal sourcers are required to comply with key regulations as described below.

Without these compliances, sourcers cannot legally operate, and it could put both them and their clients at risk

Deal Sourcers fall under the same banner as Estate Agent, and must adhere to the Estate Agents Act 1979

When you are audited (which could be 1 - 2 or more years from when you first start, you will be asked to show ALL compliance documents and registrations from the day you first started trading (not necessarily earning money in your account). Fines will be backdated to the date you first started. 

Legal compliance for deal sourcers is all about protecting clients and keeping the property market fair. It’s not just about ticking boxes—it actually helps sourcers do their jobs better and more professionally. Here’s why it matters:

Client Protection: Sourcers need to be part of a Property Redress Scheme (PRS), like The Property Ombudsman (TPO) or the Property Redress Scheme. This makes sure clients have a way to resolve any disputes if things don’t go as planned, holding sourcers accountable.

Keeping Things Legal: Deal sourcers must register with HMRC for Anti-Money Laundering (AML) supervision. They’re required to do their homework by verifying clients’ identities and making sure there’s no funny business, like illegal funds sneaking through property transactions.

Data Privacy: If a sourcer collects or handles personal data, they have to be registered with the Information Commissioner’s Office (ICO) and follow data protection laws (GDPR). This ensures clients’ info is safe and handled properly.

Professionalism and Transparency: It’s good practice for sourcers to have Professional Indemnity Insurance to protect themselves from potential claims. On top of that, they have to be clear and honest about their services and property details to follow Consumer Protection from Unfair Trading Regulations (CPRs).

Continual Professional Development: Deal Sourcers must continue to keep up to date with the current rules and regulations, and prove that they have done so, yearly.

By following these rules, sourcers can legally and ethically find property deals, protect their clients, and avoid any legal trouble. Plus, it makes them more trustworthy and professional, which is a big win for everyone!

You can use our 20 minute form or if you want to do it yourself this is what you need (and to keep up to date): 

P.I Insurance

Professional Indemnity (P.I) Insurance is essential for deal sourcers to protect themselves against claims made by clients for professional negligence, mistakes, or breaches of duty.

This insurance gives peace of mind to both the sourcer and the client by covering legal costs and compensation if something goes wrong.

Anti-Money Laundering Supervision:

Anti-Money Laundering (AML) regulations require deal sourcers to register with HMRC to monitor and prevent the use of illicit funds in property transactions.

Sourcers must conduct thorough identity checks, verify the source of funds, and ensure that they’re not facilitating money laundering activities.

Your business must be registered on the AMLS register. If it is not, you are not compliant.

Non-compliance can result in severe penalties.

Anti-Money Laundering Training 

AML training is mandatory for deal sourcers to understand their responsibilities under UK regulations.

This training ensures that sourcers can spot red flags, conduct customer due diligence, and report suspicious activity. Proper training keeps sourcers compliant and ensures they’re up-to-date with legal requirements.

AML, CDD, Risk Assessment & GDPR Policies and Procedures Paperwork

Deal sourcers must have documented policies and procedures covering Anti-Money Laundering (AML), Customer Due Diligence (CDD), risk assessments, and GDPR compliance.

These documents outline how the sourcer ensures legal compliance, protects client information, and manages risks. Proper paperwork shows that the sourcer follows industry standards and is fully prepared for audits or inspections.

These documents should be constantly updated.

Consumer Redress Scheme

Deal sourcers in the UK must be registered with an authorised Consumer Redress Scheme (like The Property Ombudsman or the Property Redress Scheme). This gives clients an official channel to resolve disputes if they are dissatisfied with the service provided. Being part of this scheme shows accountability and offers protection for both the sourcer and the client.

ICO Registration 

Deal sourcers who collect and manage personal data must be registered with the Information Commissioner's Office (ICO). This ensures compliance with the General Data Protection Regulation (GDPR), safeguarding client data and ensuring it is handled lawfully and securely. Non-compliance can result in heavy fines for data breaches or improper handling of information.

Client Account & Insurance 

If you are taking deposits / refundable fees, deal sourcers must maintain a client account, which is a separate, safeguarded bank account used to manage client funds, such as deposits or sourcing fees.

Additionally, insurance that ensures client funds are protected in case the sourcer's business faces financial difficulties.

Client Accounts are available through High Street banks, and you normally need a business account running with them first. Current wait times are up to 3 months with some banks due to approval checks.

As an investor, you typically don’t need to worry about the same level of compliance as deal sourcers, but there are still a few things you should keep in mind:

Anti-Money Laundering (AML) Checks: Even though you're not required to register for AML supervision like a sourcer, you’ll still likely need to go through AML checks when buying a property. This is to verify your identity and ensure that your funds are legitimate. It’s something that the sourcer or the legal team involved in the transaction will handle.

Due Diligence: While not a legal requirement, it's good practice for you to do your own research and due diligence on the deals you're investing in. This ensures you're making informed decisions and not getting involved in any risky or non-compliant transactions.

Data Protection: You don’t need to register with the ICO, but you should be mindful of how you handle sensitive information if you’re working closely with sourcers or other parties.

So, while you're not bound by the same regulations as a deal sourcer, it's still important to be aware of these checks and make sure everything is done above board to protect yourself and your investment.

The best Investors are 'Property Deal Makers' and make money from the deals that they don't want for themselves. In this case, you must become compliant. 

If you sell a property deal without being compliant, you could face serious legal and financial consequences. Here’s what can happen:

Fines and Penalties: If you're not registered with a Property Redress Scheme (PRS), or if you haven’t followed Anti-Money Laundering (AML) regulations, you could face significant fines from authorities like HMRC or the National Trading Standards. These penalties can be quite hefty and are meant to enforce compliance.

Legal Action: Selling property deals without being compliant is illegal and could result in legal action. You may face lawsuits from clients, especially if the deal goes wrong or if they feel misled. Being unregistered or non-compliant also removes your ability to resolve disputes through official channels, leaving you more vulnerable to legal claims.

Damage to Reputation: Non-compliance can severely damage your reputation in the property market. Investors and clients prefer to work with professionals who follow the rules, and being caught operating illegally can make it hard to regain trust and credibility in the future.

Business Closure: Persistent non-compliance can lead to authorities shutting down your business activities. If you continue to operate without meeting legal requirements, enforcement bodies may take steps to restrict or close your operations entirely.

In short, selling property deals without being compliant is risky and can lead to legal trouble, fines, and damage to your reputation. It's essential to ensure you're following the proper regulations to avoid these problems.

All policies must have your business name attached to the documents to be fully compliant.

Insurance & ICO, PRS and access to your AML training is provided to you within 2 days.

 You will have to complete your training while you wait for your business to be named under HMRC AMLS, which can take up to 45 days (although in most cases it is quicker).

   Using our service, you will be able to legally trade within 7 - 10 days of submitting your application form. 

That's just enough time for you to get your website, cards, training and other bits out the way.

Like the old saying goes, good things come to those who wait. 

No, you do not need a client account to be a deal sourcer if you are not handling any money (apart from your non-refundable fees). Most deal sourcers do handle client money (holding fees). Holding these fees in a normal 'business bank account' is against law and regulation, so we suggest that you use your solicitor to hold your fees until you are due to be paid.

There are over 15 acts and regulations that deal sourcers must be aware of and adhear to. We will give you a document the required information on these policies. You are not required to know these from memory, but to be aware of them. 

As it currently stands, to ensure compliance is done correctly, we cannot take on 'part' compliant applications. We are working hard with the legal team to find a solution for this. 

All policies are bought on your behalf for 1 year, so we get charged accordingly. In reality, if you are deal sourcing, you don't want your policies to expire at any point. If you stop trading, you can always cancel your subscription.

You can let us know you wish to cancel at cancellations@becomecompliant.co.uk. 

We will remind you by email 30 days before your renewal is due. 

To be independently compliant (you will need to have your own insurance policy with your name). For this to happen, you will need to pay the insurers directly. Don't worry, we have done all the hard work and negotiation for you already, you won't have any other forms to fill out, and you won't have to speak with anyone. it is just a separate link to pay for the insurance.