Very few landlords are prepared for new mandatory sanctions check!

 
15/05/2025

New Sanctions Checks Now Mandatory for Lettings Industry: What Landlords and Agents Need to Know

From May 14, 2025, all letting agents in the UK must comply with new regulations that require mandatory financial sanctions checks on all landlords, tenants, and guarantors — regardless of rent amount.

 

This legal shift marks a significant tightening of compliance obligations under the Sanctions and Anti-Money Laundering Act 2018, aiming to combat financial crime, terrorism funding, and other unlawful behaviour within the UK property market.

🔍 What’s Changed?

Under the previous system, financial sanctions checks were only required for high-value tenancy agreements (where rent exceeded €10,000 / £8,300 per month). As of May 14, these checks are mandatory for all tenancy agreements, with no minimum rent threshold.

 

Letting agents are now legally obligated to report to HM Treasury's Office of Financial Sanctions Implementation (OFSI) if they have:

  • Reasonable grounds to suspect a breach of financial sanctions

  • Direct evidence of such a breach

These checks must be conducted at the following key stages:

  • When a landlord instructs an agent

  • When a landlord accepts a tenant’s offer

  • When a guarantor is involved in rent payment or direct engagement during a tenancy

⚠️ Why It Matters

Failure to comply with the new rules can result in:

  • Substantial financial penalties — potentially into the seven figures

  • Criminal prosecution for individuals and companies involved

The risk is real: recent industry surveys reveal that only 20% of landlords and letting agents currently feel prepared for these changes.

✅ What Landlords and Agents Should Do Now

  • Implement or update compliance protocols for tenant onboarding

  • Train staff on OFSI guidelines and reporting obligations

  • Verify all parties involved in a tenancy — including guarantors — through approved sanctions screening tools

  • Document all checks and retain records in case of audit

We’ve already updated our internal processes to ensure full compliance and are working closely with landlords to guide them through the new requirements.

🛠️ Need Help Navigating These Changes?

Whether you're a first-time landlord or an experienced investor, our team is here to ensure you're protected, informed, and compliant.

📩 Contact us today to speak with a member of our compliance or property management team.

 

contactus@rochardking.com

 
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