Important Updates for Letting Agents: Mandatory sanctions checks are coming

Important Updates for Letting Agents: Mandatory sanctions checks are coming (14 May 2025)

From 14 May 2025, all UK letting agents will be legally required to carry out financial sanctions checks on both landlords and tenants. This major regulatory change is aimed at increasing the integrity of the rental sector by ensuring those subject to sanctions are not involved in property transactions.

What are financial sanctions?

Financial sanctions are legal measures imposed by governments that freeze the assets of individuals, companies, or organisations listed for various reasons, including national security or human rights violations. In the UK, the Office of Financial Sanctions Implementation (OFSI), part of HM Treasury, manages the consolidated list of sanctioned entities.

New obligations for letting agents

Previously, only estate agents had a legal duty to report any suspicions that a client might be a designated person. From 14 May 2025, letting agents will also be required to comply. Key responsibilities include:

  • For Landlords: Agents must carry out sanctions checks at the point of instruction, verifying the landlord’s identity and checking them against the OFSI consolidated list.
  • For Tenants: Once a rental offer is accepted, agents must check prospective tenants to ensure they are not subject to financial sanctions.

The risks of non-compliance

Failing to comply with these new legal obligations can lead to substantial fines and, in some cases, criminal penalties. Transactions involving sanctioned individuals also risk serious reputational damage for both agents and landlords.

Do these rules apply to existing tenancies?

The checks only apply to new tenancies and landlord instructions from 14 May 2025 onwards. There’s no requirement to carry out retrospective checks on existing arrangements.

Getting ready for May 2025 – What you should do now:

  • Review your internal policies and update them to include sanctions screening.
  • Train your staff to understand and apply the new regulations.
  • Proactively communicate with landlords and tenants about these new checks.
  • Lean on LFL for ongoing support and the tools to stay compliant.

By acting now, you can stay ahead of the curve, reduce risk, and reassure clients that you’re fully compliant. Our Professional Services team is here to help you meet the challenge confidently.

Get sanctions support here.