New Sanction Rules for Letting Agents
Letting agency businesses across the UK need to work to a new sanctions reporting framework from today, 14 May 2025, and Propertymark has stressed that it is vital that every agent understands the rules and adjusts working practices and systems accordingly.
Under the Sanctions and Anti-Money Laundering Act 2018, the UK Government introduced a new regime of issuing financial sanctions following the UK’s departure from the European Union. Under the Act, businesses specified in the Act have to report to the Office for Sanctions Implementation (OFSI) if they suspect they are engaging with a client who is under financial sanctions. Previously, only estate agents were required to complete sanctions checks and report to the OFSI. This legal duty will now extend to all letting agents.
Letting agents will be legally required to check the OFSI list of sanctioned individuals and organisations throughout their work. This includes being instructed by prospective landlords or prospective tenants to finalise agreements.
Under the obligations, letting agents are required to report to OFSI as soon as practicable if they know or have reasonable cause to suspect their client is sanctioned, or has breached financial sanctions regulations.
What’s key, and an area that has caused confusion, is that the reporting obligations apply in relation to letting agency work irrespective of the value of any rental agreement. This is in contrast to the definition of letting agency work under the Money Laundering Regulations under which letting agency work relates to lets with a rent of 10,000 euros or more.
Under the new sanctions reporting regime, OFSI requires letting agents to check landlords in response to instructions received from the landlord and if they become suspicious of the landlord during the carrying out of any works following the instructions. When receiving instructions from the landlord, letting agents are only expected to carry out checks on tenants when the landlord and tenant are in the process of signing the tenancy agreement. This means letting agents are not expected to check all tenants, only those who are expected to live at the property.
When taking instructions from tenants to seek potential property, letting agents are only expected to check both the tenant and the landlord when both parties are in the course of signing a tenancy agreement.
Through Propertymark’s network of members, some confusion has been highlighted around the rules and the industry body has produced resources accordingly to help agents navigate the requirements.
You May Also Enjoy
Five-year slump in construction activity is a wakeup call
1 in 5 Brits Surveyed Have No Savings
How Next-Gen Technologies Can Elevate Your Business Operations
With new legislation being introduced, should you use an agent or continue with DIY lets?
The small print trap that every homebuyer should know before moving in
