Financial Sanctions Regulations

Government Crackdown on criminal Contract Holders and Landlords

Financial sanctions regulations for letting agents are coming in from the 14th of May. This requires agents to check both landlords and tenants (& Guarantors if applicable) against financial sanctions. These checks are to ensure that criminal tenants and landlords cannot enter into rental agreements. 

Agents will need to check landlords as soon as they are formally instructed, this means confirming their identity and making sure they are not on the government’s sanctions list before moving ahead with anything. These checks should align with agents conducting their CDD (Customer Due Diligence) checks. 

For tenants, checks will need to be done once their offer has been accepted. This is to make sure no tenancy agreements are made with anyone who’s on the sanctions list. These checks should be incorrorated as part of the agent's referencing process. 

Under these sanctions agents must report any confirmed or suspected sanctions breaches to the Office of Financial Sanctions Implementation (OFSI)

Agents are only legally required to carry out these checks on propspective clients and contract holders however it is best practice to keep up to date with the OFSI list. Agents can do this through signing up to the Sanctions list alerts and updates.

Non-compliance with the new regulations could result in a fine of more than £1 million or 50% of the value of the breach. 

The UK Sanctions list can be found here
The list for the Office of Financial Sanctions Implementation can be found here

I have also included GOV guidance links below:

General Guidance 

Guidance for letting agents