From 14th May 2025, new regulations will come into effect requiring letting agencies in England to carry out enhanced sanctions checks on prospective tenants and landlords. These changes are part of the UK government’s efforts to tighten compliance with financial sanctions and anti-money laundering (AML) laws. As a landlord, it is essential to understand how these checks may impact you and your letting arrangements.

What Are Sanctions Checks?

Sanctions checks involve screening individuals and entities against government-published lists to ensure they are not subject to financial restrictions or bans due to criminal activity, terrorism, or other illicit conduct. The UK government, through the Office of Financial Sanctions Implementation (OFSI), maintains an updated list of sanctioned individuals and organisations.

From 14th May 2025, letting agencies will be legally required to perform these checks before facilitating a tenancy agreement. If a landlord or tenant is found to be on the sanctions list, the agency must take appropriate action, including reporting to the authorities and potentially refusing to proceed with the letting.

How This Affects Landlords

As a landlord, you should be aware of the following key points:

1. Additional Due Diligence from Letting Agencies

Letting agents will need to verify your identity and check whether you appear on the UK’s financial sanctions list. This means you may be required to provide additional documentation when instructing an agency to let your property.

2. Potential Delays in Lettings Process

With these mandatory checks, there could be slight delays in the process of securing tenants, especially if further investigation is needed. Landlords should factor in extra time when planning new tenancies.

3. Increased Compliance for Self-Managing Landlords

If you manage your own properties and do not use a letting agent, you may still have responsibilities under the new regulations. It is advisable to conduct sanctions checks yourself or consult legal professionals to ensure compliance.

4. Risk of Property Freezing Orders

If a landlord is found to be in breach of sanctions regulations, authorities could impose a property freezing order, preventing any rental income or transactions involving the property. This underscores the importance of ensuring compliance.

What Should Landlords Do Now?

To prepare for these changes, landlords should:

• Ensure Personal and Business Records Are Up to Date – Make sure your identity documents and financial records are current to avoid any issues during agency checks.
• Communicate with Your Letting Agent – If you use a letting agency, check what procedures they will implement and how they will affect your property lettings.
• Consider Conducting Your Own Sanctions Checks – If you manage your own properties, explore online resources or compliance services that can help you screen tenants effectively.
• Stay Informed on Financial Sanctions Regulations – Keep up to date with changes in UK sanctions laws and government guidance to avoid inadvertent breaches.

While these new checks introduce an extra layer of compliance, they are designed to prevent financial crime and protect the property market from illicit activities. By understanding your responsibilities and working closely with a reputable letting agency, you can ensure a smooth transition when the regulations take effect on 14th May 2025.

If you have concerns about how these changes might impact your property portfolio, consider seeking professional legal or compliance advice to stay ahead of the curve.

For more updates on landlord regulations and compliance, keep an eye on government announcements and industry news.