Here are some Burning Questions & Answers (Ahead of May 14, 2025)
1. General Overview
✅ What are sanctions?
Sanctions are restrictions imposed by the government to prevent financial crime, protect national security, and fulfil international obligations. These can target individuals, businesses, or entire countries.
✅ Which sanctions are most relevant to letting agents?
Financial sanctions. These block access to funds and services for individuals or entities listed on the UK sanctions register.
✅ What’s changing on May 14, 2025?
Letting agents will legally be required to screen all tenants and landlords for sanctions and report confirmed or suspected matches to the Office of Financial Sanctions Implementation (OFSI).
✅ To whom does this apply?
All letting agents in the UK, regardless of company size or clientele.
✅ Why should I care about changes to sanctions regulations?
Non-compliance may result in severe penalties, including fines up to £1 million, criminal prosecution, or reputational harm.
✅ Has anyone been fined for breaching sanctions regulations?
Yes. In 2024, a letting firm was fined £15,000 for non-compliance.
✅ Will there be a grace period for compliance?
No. Full compliance is mandatory from May 14, 2025.
✅ Who needs to complete the checks?
Letting agents must carry out these checks. Landlords must not be delegated this responsibility.
✅ How should I prepare for these changes?
1. Integrate screening into onboarding workflows
2. Train staff to recognise matches and escalate appropriately
3. Maintain accurate and accessible records of all checks
2. Who Needs to Be Checked?
✅ Does every type of tenant need to be checked?
Yes, including students, professionals, and company lets.
✅ Do landlords need to be checked?
Yes, including directors if the landlord is a company.
✅ What about joint landlords or joint tenants?
Each party must be checked individually.
✅ Do I need to check guarantors as well?
It is highly recommended, especially if they are financially responsible.
✅ Do I need to check permitted occupiers?
Only if they are financially involved or linked to politically exposed persons.
3. Timing of Checks
✅ When is the right time to run a tenant sanctions check?
After offer acceptance but before the tenancy agreement is signed.
✅ When is the right time to run a landlord sanctions check?
During initial onboarding, before marketing the property.
✅ Can I take a holding deposit before running a tenant sanctions check?
Yes, but the check must be completed before the tenancy agreement is signed.
✅ What’s the last possible moment to run the tenant check?
Immediately prior to signing the tenancy agreement.
✅ Do I need to recheck someone if there’s a delay to the tenancy?
Yes, if significant time passes. The sanctions list updates frequently.
✅ Do I need to ask tenants or landlords permission to conduct a sanctions check?
No, but your privacy policy must disclose how personal data is used.
✅ Will tenants know they’ve been screened?
Unlikely. Checks are silent and part of referencing.
✅ Will landlords know they’ve been screened?
Possibly. A soft credit footprint may appear during Know Your Customer (KYC) checks.
4. Existing Tenancies and In-Situ Landlords
✅ Do I need to screen existing tenants and landlords?
Not legally required, but strongly advised.
✅ Should I proceed with tenancies that start before the regulation comes into place?
Yes. The law is not retroactive.
✅ Does the regulation apply to renewed tenancies?
No, but OFSI recommends re-screening.
✅ How does Green Tick help with sanctions checks for existing tenants and landlords?
We offer portfolio-wide screening via secure onboarding systems or can integrate with third-party tools such as Goodlord.
5. What Happens if There’s a Match?
✅ What do I do if I find a potential match?
Immediately report it to OFSI, even if you are unsure.
✅ Can I go ahead or continue a tenancy if there’s a match?
No. A licence from OFSI is required to proceed.
✅ Do I need to be certain it’s a match before reporting?
No. Suspicion alone requires reporting.
✅ What should I do with a flagged tenant’s holding deposit?
Do not return or retain the deposit until OFSI provides direction.
6. Ongoing Monitoring and Record Keeping
✅ Do I need to monitor tenants after the check is complete?
No, but it’s good practice. Green Tick partners monitor for 12 months post-check.
✅ How long should I keep records of sanctions checks?
For the entire tenancy and a reasonable period after, in line with your data policy.
✅ How should I store these records?
Securely, along with your referencing documents.
7. AML Supervision vs Sanctions Checks
✅ Is this the same as AML registration?
No. These are separate legal obligations.
✅ If I’m already AML-registered, do I still need to do this?
Yes. Sanctions checks are mandatory in addition to AML.
✅ What do I do if I’m not already AML-registered?
You don’t need to register for AML just to comply with sanctions rules. But if you meet AML thresholds, you must register.
✅ Does the new sanctions regulation change AML guidance or thresholds?
No. AML thresholds remain the same.
✅ Does an agent need to run an AML check on the same landlord every time their property is re-let?
No, but refreshing the check annually is best practice.
✅ How is a sanctions check different from a right to rent check?
Right to Rent checks immigration status. Sanctions checks screen against a financial restrictions list.
