Date Published 16 May 2025
All UK letting agents are legally obligated to screen landlords, tenants, and other clients against the UK government's official sanctions list, in accordance with newly enforced financial sanctions regulations which have come into effect as of 14th May. The change marks a significant tightening of compliance obligations across the property rental sector. Previously incorporated within broader Anti-Money Laundering (AML) due diligence protocols, sanction checks now constitute a standalone legal requirement. Under the updated framework, letting agents—now formally classified as 'relevant firms'—are required to identify and report any individuals or entities appearing on, or suspected of appearing on, the UK Sanctions List.
The updated guidance, issued by industry body Propertymark, outlines that a sanctions check is a screening mechanism to identify persons or organisations listed on domestic or international sanctions registers. These registers include individuals and entities implicated in money laundering, terrorism financing, human rights abuses, organised crime, political corruption, and threats to national security. Should an individual or business be identified—or reasonably suspected to be listed—agents must immediately freeze any associated assets or property and notify the Office of Financial Sanctions Implementation (OFSI). Failure to comply with these duties can result in severe penalties, including fines of up to £1 million.
Letting agents are now held to the same compliance standards as estate agents, law firms, and financial institutions. Their responsibilities include:
• Verifying clients against the UK Sanctions List
• Freezing any assets or interests held on behalf of designated persons
• Promptly reporting confirmed or suspected matches to the OFSI
• Maintaining accurate and comprehensive records of all checks and related actions.
To support compliance efforts, agents are advised to consult both the UK Sanctions List—maintained by the Foreign, Commonwealth and Development Office—and the OFSI Consolidated List of Financial Sanctions Targets. Additional guidance can be found in the government's General Guidance to UK Sanctions.
Nishma Parekh, Director of Referencing at Goodlord, highlighted the urgency for landlords and agents to adapt: 'Every single landlord and tenant, regardless of the rental value, must now undergo sanctions screening. With four in five landlords feeling unprepared for these changes, it's imperative they act swiftly to ensure compliance. Even genuine errors could lead to staggering penalties of up to £1 million.'
As your trusted Agent, Adams Estates will ensure our methods of referencing both landlords and tenants are evolving on a frequent basis to ensure compliance with these new regulations being put in place.
