🏛️ Financial Sanctions Checks
- MAS Letting's & Management
- Nov 23
- 3 min read
Are you keeping upto date with compliance?
Letting agents become “relevant firms”
From 14 May 2025, letting agents are officially classed as “relevant firms” under UK financial sanctions regulations.
This means they have reporting obligations to the Office of Financial Sanctions Implementation (OFSI).
No monetary threshold
Unlike previous anti-money laundering (AML) rules, these sanctions checks apply regardless of the rent level.
Every letting agent must check all prospective landlords and tenants (and relevant other parties) against the UK sanctions list.
Which people need to be checked
Letting agents must check:
Prospective landlords, at the point they instruct the agent.
Prospective tenants, but specifically from the point where an offer has been accepted (i.e. when they are “in the course of concluding an agreement”). GOV.UK
Guarantors, permitted occupiers, and beneficial owners (if the tenant or landlord is a company) also must be checked. Let Alliance
What to do if there’s a match or suspicion
If the agent knows or has reasonable cause to suspect someone is on the sanctions list, they must report to OFSI as soon as practicable.
They must include in the report: the basis for their suspicion, identifying information, and — if the person is their customer — details about any “funds or economic resources” held.
Agents should not proceed with any tenancy agreement (or accept payments) until they get clearance (or further guidance) from OFSI. NRLA guidance suggests suspending activity in such cases. NRLA
Record-keeping
The checks must be recorded, even if there is no hit. Letting agents need to keep evidence of what checks were done. NRLA
This helps show compliance if OFSI ever audits or investigates.
Ongoing monitoring
According to some guidance, letting agents should perform ongoing checks or “monitoring” if needed.
However, Let Alliance notes that for under-threshold lets, there is no blanket requirement for continuous monitoring post-check, but agents must ensure they don’t breach sanctions rules over the life of the tenancy.
Consequences of non-compliance
Failing to do the checks, or failing to report a match / suspicion, can lead to serious penalties: large fines, potential criminal liability. BRM Solicitors
Letting agents need to put in place robust processes (due diligence, training, systems) to comply. Chase Evans
What this means for Landlords
If you use a letting agent: they will now check you against the sanctions list when you instruct them.
Be prepared to provide identity documentation (or other verification) as part of onboarding.
During tenancy renewal or if there is a change (e.g., new tenant), further checks may be required.
What this means for Tenants (and Guarantors)
You’ll likely be asked for more detailed identity info during the referencing process than before. Letting agents will run your name through the UK Consolidated Sanctions List.
These checks will happen at referencing stage
If there is a “positive match” or suspicion:
The agent must report to OFSI.
They may pause further steps until they have clarity
If your tenancy started before 14 May 2025, the new rules don't require a retrospective check; but if you renew, a new check applies.
Why this change was introduced
The government (via OFSI) wants to close a loophole: previously, many letting agents were not covered by financial sanctions “relevant firm” rules.
There was a risk that sanctioned individuals or entities could use property letting as a way to access financial resources or launder money.
By making checks mandatory for all lets (regardless of rent), the aim is to strengthen the UK’s sanctions regime in the property sector.
For enquiries or more information on the latest residential letting compliance 2025
get in touch with one of the team
07377 439 203
