Financial Sanctions And Letting Agents: Essential Information For Landlords

 

In May 2025, the Government made it essential for all letting agents to perform sanction checks on every landlord and tenant before signing a tenancy agreement.

As a landlord in Kent, it's great to know that at Quealy & Co., we've smoothly integrated these checks into our routine, with no extra cost for you.

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Understanding Financial Sanction Rules

Starting 14 May 2025, major updates have come into play for the UK’s financial sanctions rules. These changes are part of efforts to fight financial crime like money laundering and sanctions evasion.

Before, these regulations only applied to high-value transactions over €10,000 per month. Now, letting agents need to perform financial sanctions checks on all tenants and landlords regardless of rent.

At Quealy & Co., we ensure every prospective tenant or landlord is verified against the UK sanctions list, and any listings are promptly reported to the Office of Financial Sanctions Implementation (OFSI).

This aligns the property market with other regulated sectors like banking. As letting agents represent landlords, lapses in compliance by agents can pose risks to landlords too.

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What Landlords Should Know

So, what does this mean for you as a landlord in Kent? Simply put: be more vigilant than ever when choosing a letting agent. Choosing a non-compliant agent can lead to significant financial penalties, legal issues, and damage to your reputation.

Even though letting agents are responsible for compliance, landlords are still accountable for their choice of agent. Here's what you should be aware of:

1 – Due diligence matters

Before signing any contract, ask your letting agent:

• Do you have Client Money Protection (CMP) insurance?
• Are you up-to-date with Anti-Money Laundering (AML) requirements?
• How do you perform sanctions checks?

If they can't answer, see it as a warning sign.

2 – Keep records

Make sure your agent has documentation of all checks done. These records must be preserved for at least 5 years. Skipping this can result in fines.

3 – You might need to inform

If you realize a tenant, applicant, or related party is on the financial sanctions list, you must report it to the OFSI, as not doing so could lead to legal action.

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Consequences of Non-Compliance

Ignoring the new financial sanctions rules isn't just about ticking boxes; it can have serious legal and financial outcomes for landlords. Whether stemming from your actions or your letting agent’s, the stakes are high and can't be overlooked. These are not mere technicalities; they can affect your finances, reputation, and ability to rent out your property confidently.

Neglecting these rules can be costly:

• Fines up to £1 million or 50% of the transaction value, whichever is higher
• Criminal charges and potential imprisonment in severe cases
• Investigations and reputational harm that could affect your future ability to rent property

Remember, even if the issue originates with the agent, as the landlord, you still might be held liable.

Letting property in the UK isn't just about selecting the right tenants; it's also about picking a letting agent who protects your investment and keeps you compliant with the law.

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Is Your Rental Portfolio Covered?

The takeaway is clear: non-compliance can be pricey. By partnering with a reliable and trustworthy letting agent like Quealy & Co., you can have peace of mind knowing we value compliance just as much as you do.

Have questions? Feel free to connect with our expert lettings and property management team. We're happy to offer advice and support.

Call us at 01795 429836 or email us at hello@quealy.co.uk