Date Published 16 May 2025
From 14th May 2025, all UK letting agents must comply with updated rules surrounding sanction checks as part of their anti-money laundering (AML) responsibilities. While this may sound like an administrative change, the implications are significant. Failure to comply properly could lead to hefty fines or even criminal liability.
So, what exactly is changing — and what does it mean for you as a landlord?
What Are Sanction Checks?
Sanction checks involve screening individuals or companies against the UK and international sanctions lists to ensure you're not unknowingly renting a property to someone who is subject to financial sanctions. This can include individuals with frozen assets, links to organised crime, terrorism, or international embargoes.
Up until now, many landlords and agents have treated sanction checks as a one-time tick-box exercise — usually carried out at the start of a tenancy. From 14th May, however, that approach won't be enough.
What's Changing?
The new guidance from HM Treasury and the Office of Financial Sanctions Implementation (OFSI) sets out clear expectations:
Initial checks must be conducted before entering into a tenancy agreement.
Ongoing monitoring is now a mandatory requirement. Letting agents and landlords must continue checking tenants and other relevant parties throughout the duration of the tenancy.
This includes rechecking against updated sanctions lists at regular intervals or whenever there is a change to the tenancy or its occupants.
If your current letting agent isn't proactively updating their procedures you could be at serious risk.
Why This Matters
The consequences of getting this wrong are not just theoretical. The fines for breaches of financial sanctions can be severe — up to £1 million or more, depending on the severity and nature of the breach. Even unintentional non-compliance can result in enforcement action.
In some cases, landlords could find themselves liable simply because they didn't know their agent had failed to carry out proper checks or monitoring. That's why the new rules place a greater emphasis on ongoing due diligence and clear accountability.
Questions Every Landlord Should Be Asking
Is your letting agent updating their policies and systems to meet the new rules?
Are regular sanctions checks built into your ongoing tenancy management?
Do you have documentation to prove your compliance if challenged?
If you're unsure of the answer to any of these, now is the time to act.
Peace of Mind Through Professionalism
At a time when regulations are tightening and enforcement is increasing, landlords need to feel confident that their interests, and reputations, are being protected.
If you're in any doubt about whether your current letting agent is fully prepared for these changes, get in touch. We're here to help ensure your lettings portfolio stays protected, compliant, and stress-free.
For more information please take a look at the UK Govt site - https://www.gov.uk/government/publications/financial-sanctions-general-guidance/uk-financial-sanctions-general-guidance
