As of today, a significant regulatory change is reshaping the responsibilities of letting agents in the UK.
Agents are now legally required to check tenants, landlords, and other clients against the UK’s official sanctions list. This move aims to strengthen national security measures and curb illicit activities, but it also places a new layer of compliance obligations on letting agents.
If an agent identifies or suspects a match with the sanctions list, they must:
- Report the finding to the Office of Financial Sanctions Implementation (OFSI).
- Freeze any property or assets associated with the individual or entity in question.
Why Might Someone Be on the Sanctions List?
Individuals or entities may appear on the sanctions list for several reasons, including:
- Money laundering
- Terrorist financing
- Human rights violations
- Organized crime
- Political corruption
- National security threats
This underscores the critical nature of these checks in safeguarding the integrity of the UK property market.
Checks must be conducted as soon as an agent is formally instructed. Currently, these checks are only mandatory for rental agreements where the monthly rent exceeds £8,300.
Penalties for Non-Compliance
Failing to perform these checks or properly report matches can result in severe penalties, including:
- Fines that can reach seven figures.
- Potential criminal prosecution.
This makes compliance not just a regulatory requirement but also a critical safeguard against significant financial and legal repercussions.
Industry Insight
Pranav Bhanot, founding partner of WYN Legal, shared his perspective on the new regulation – “This new change to the regulatory framework is important but will require letting agents to keep on top of their clients. It is also part of an increasing set of obligations placed on property professionals.”
If you are a letting agent or property professional and require assistance with your lettings, do contact info@wyn.legalcontact.
