Newbuild reservation fee needs to be paid through solicitor? Is this normal?

[mightybuzz]

We have reserved/bought new builds before and have never encountered this (we just paid agent the reservation fee directly!)

The agent is insisting this is due to money laundering regulations.

Having to instruct our solicitor to pay the £1000 fee will cost us both time (which means someone could beat us to the house, if they managed to pay the reservation fee before us) and money (solicitor's fee).

Is this (now) normal or is the agent being ridiculous?

Is it a non refundable fee? Perhaps they want you to go through a solicitor so you are aware of the reasons why you won’t get this back if you pull out/sale falls through/ don’t exchange in the relevant time frames and can sign some form of document which explains all this. If it’s a pressure tactic to get you to use their own legal team, then i’d avoid!!

"If it’s a pressure tactic to get you to use their own legal team, then i’d avoid!!" this is what I wondered! Because they already mentioned that we could use their solicitor, which we will not do.

This is becoming mre common,basically if you want the house it will have to be done their way.If you are instructing a solicitor to deal with the legal work I can't see them charging an extra fee for paying the reservation fee

I did a little more digging, because this sort of thing interests me and it seems that if the developer is selling the property to you (is using their own employed sales team), then they aren’t subject to the Anti Money Laundering regulations as this would be classed as a peer to peer transaction, however, if the property is being sold by an estate agent on behalf of the developer, then they are liable to follow the AML regulations and be registered and be supervised by HMRC for this purpose. I didn’t look into the specifics of the AML regulations, but it would seem likely that a solicitor would be required to make sure your money wasn’t coming from a dodgy place!!

I can well believe that it’s down to money laundering regs, which are a real pain in the arse. I’m quite sure that actual money launderers know how to get round them, whereas the rest of us have all the the hassle and cost.

Thank you for the clarification! A real pain since it just slows things down. It's not like we're wanting to pay with a bag of bank notes!