5 Steps To Setting Up Your Property Sourcing Business

5 Steps To Setting Up
Your Property Sourcing
Business Legally and Properly
www.GoliathSourcingAcademy.com

If you’re thinking about setting up a
property sourcing business, one of your
biggest concerns should be how to set up
your business legally and properly. If you
don’t get this right, there could be
consequences to your business and to
you individually as the business owner.

SETTING UP AS A PROPERTY SOURCING BUSINESS1
The first thing to think about is whether your business is in
fact, a property sourcing business. If you’re purely sourcing
properties for yourself, rather than packaging and selling on
for a fee, you don’t have to set up as a sourcing business. If
you’re going to be a property sourcing business, you will
need to have all of the relevant legal checks in place.

REGISTERING WITH HMRC AND REGULATORS2
The property industry is highly regulated to protect all parties
that are involved in property transactions. Property deal
sourcing comes under the same category as estate agents in
terms of governance, so we have to work by the same rules.
You must register your business with HMRC in the correct
way, so select the relevant set up such as limited company,
sole trader or limited liability partnership.

The property industry is governed by three separate
ombudsman schemes, which offer independent
bodies for customers to raise complaints through.
This would happen if the customer wasn’t happy
with the way that you dealt with their complaint, so
the ombudsman is the next stage of escalation.

The three property ombudsman schemes are:
1. Ombudsman Services
2. The Property Ombudsman (TPO), and the
3. Property Redress Scheme (PRS)
Property deal sourcers must be members of one of these
schemes. Goliath Property Solutions are members of the PRS,
which costs around £95 plus VAT each year.

REGISTER FOR ANTI MONEY LAUNDERING LEGISLATION
3
Criminals often use the property industry to launder
money. If you’re not familiar with the term, money
laundering basically means that they try to hide the
money that they gained through criminal activity by using
what looks to be legitimate methods.

Property sourcing businesses must be registered with
HMRC for the Anti Money Laundering Legislation. This
means that any suspicions of such activities must be
reported and you can be subjected to fines if you are
deemed to have not taken appropriate action.

TAKING OUT INSURANCES4
Setting up the correct types of insurance will protect you from
potential issues such as being sued. In the property industry,
where large sums of money are involved, this is more common
than you might think. For example, you may find yourself in a
situation where investors try to sue you for what they perceive to
be giving incorrect information on a deal. If you take out the
correct types of insurances, you will protect yourself from this.

The two types of insurances we have as brokers, are:
1. Professional Indemnity Insurance, and
2. Public Liability Insurance
It is really important that you get these set up, ours costs
around £500 per year for the combined policy.

REGISTER UNDER DATA PROTECTION ACT5
We also have huge responsibilities in regards to data
protection. We are holding lots of personal information about
buyers, sellers, landlords etc. and we are responsible for
protecting that information. Property sourcing businesses
must register under the Data Protection Act with the
Information Commission Officer. This only costs £35 per year
and is really important.

We’re not trying to scare people but property is an industry
where you must comply with all the regulations and
register and set up correctly. Missing anything out could
lead to huge consequences; look at what happened with
PPI/miss-selling etc. You really do need to ensure that you
dot all of the i’s and cross all the t’s when it comes to
setting up a property sourcing business.

FREE RESOURCE
Ensure you’re set up correctly by downloading our free
‘Property Deal Sourcing Business Setup Checklist’
Just go to www.GoliathSourcingAcademy.com/upgrade02

For More Property Deal Sourcing Strategies,
Tactics and Tips Listen To
The Goliath Sourcing Academy Podcast at

5 Steps To Setting Up Your Property Sourcing Business

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5 Steps To Setting Up Your Property Sourcing Business