From 14 May 2025, there will be a requirement in law to carry out financial sanctions checks on both prospective landlords and tenants. This new legal duty forms part of the UK Government’s wider effort to strengthen national security and uphold the integrity of the financial system.
What will happen for landlords?
An identity check for prospective landlords and tenants will be performed to compare against the UK Government’s consolidated list of individuals and entities subject to financial sanctions.
This will require ongoing monitoring and is required each time a property is instructed to let or re-let.
What obligation must Letting Agents meet?
Letting agents must submit a report to the Office of Financial Sanctions Implementation (OFSI), part of HM Treasury if they become aware of, or have reasonable cause to suspect that a person is a designated individual, or there has been a breach of financial sanctions regulations. It is important that in such cases, you cease all dealings with the individual or entity and avoid making any payments to them.
Why Does This Matter?
Financial sanctions support the UK’s foreign policy and national security. For letting agents, complying with these rules is not optional – it’s a legal duty. Failure to comply may result in civil or criminal penalties under the Policing and Crime Act 2017, including monetary fines.
Full government guidance on the new duties can be found on the Government website at https://www.gov.uk/government/publications/financial-sanctions-guidance-for-letting-agents/financial-sanctions-guidance-for-letting-agents
At Northwood we have a procedure and process for landlords to ensure that our landlords and prospective tenants comply with this legislation.
If you are a self-managing landlord and want to know more about how Northwood can assist, please get in touch with one of our property specialists.
