Sanctions checks for estate and letting agents: a practical UK guide

What changed for letting agents?

From 14 May 2025, letting agents carrying out work within the statutory definition became relevant firms for financial-sanctions reporting. Those reporting obligations apply regardless of rental value. Do not import a rent threshold from the Money Laundering Regulations into the sanctions reporting test.^[1]

The practical consequence is a need for staff to recognise and escalate relevant information, including in an ordinary residential letting. An expensive property is not the only reason to ask a sanctions question. Conversely, a new reporting obligation does not turn a sanctions search into a complete tenant-reference, identity or affordability check.

OFSI’s FAQ 143 says legislation does not require letting agents to screen every landlord and tenant against a register. Agents must still comply with the prohibitions, and screening can help them do so. A paid screening subscription is not itself a legal requirement.^[2]

Understand the landlord and tenant reporting points

OFSI’s letting guidance ties landlord-related reporting to the point of instruction. For a prospective tenant, it generally bites when an offer is accepted and the parties are concluding a letting agreement of a month or more. The guidance also covers agents instructed by tenants. These reporting triggers are distinct from the underlying sanctions prohibitions.^[1]

Translate those distinctions into your agency’s workflow rather than relying on a negotiator to remember them. Our suggested process creates a landlord review task with the instruction and a tenant review task before the tenancy proceeds. Give staff an immediate escalation route when relevant information arrives at another point.

Map the steps your business actually performs: accepting an instruction, recording an offer, taking a holding deposit, agreeing a tenancy and handling rent. Decide which team owns each step. If your software uses one “compliance complete” flag, document exactly what that flag does and does not cover.

• Record whether the file concerns a sale, a letting or property management.
• Identify the instructing person and the legal landlord or tenant, not only a contact name.
• Record the relevant instruction and offer-acceptance dates.
• Assign someone to unresolved results before an affected payment or transaction proceeds.

A company landlord needs more than a trading-name search

A property can be marketed under a brand while the tenancy agreement names a different company. Start by matching the file to the correct legal entity and company number. Then identify the people whose ownership or control needs review. Treat unexplained differences between the instruction, tenancy documents and payment recipient as questions to resolve.

HMRC’s estate-agency risk guidance identifies sanctions evasion among the threats connected with property transactions. Its wider due-diligence guidance is relevant context, but it should not be mistaken for a statement that every letting has the same AML requirements as an estate-agency sale.^[3]

Illustrative example: a fictional landlord company appoints an agent through a property manager and asks for rent to be paid to another company. An organised file records each role and the explanation for the payment instruction. Screening only the manager’s name would leave the identity of the landlord and recipient unresolved.

Review a potential match without treating it as a verdict

A name match alone is not necessarily a target match. OFSI advises using the other identifying information on the list to assess whether it is the same person.^[4]

Ask a trained reviewer to record what agrees, what differs and what remains unknown. Avoid describing a tenant or landlord as sanctioned merely because a search returned a similar name. Keep operational communications factual: an identity or sanctions question is under review, and the nominated decision-maker is assessing the next step.

Where the business has knowledge or reasonable cause to suspect designation or a breach within the relevant reporting scope, OFSI says a report is required as soon as practicable. Do not build a policy that waits for a confirmed match in every case.^[1]

Do not move or return potentially affected money simply to remove it from your workflow. Escalate the particular transaction and obtain advice on the applicable restrictions. Preserve the instructions and evidence so the responsible person can assess the situation accurately.

Make the review record useful to another branch

For a multi-branch agency, the useful unit of evidence is a person or entity in a particular role on a particular file. Two branches checking the same company should be able to understand each other’s work without assuming that an old result answers a new question.

Our suggested record contains the searched name, role, identifiers, source and search date, possible-match references, reviewer and rationale. Also record an incomplete check explicitly. A failed search or unavailable source should not look the same as a completed search with no returned matches.

For ongoing work, choose review triggers appropriate to your activities: a new landlord entity, a changed rent recipient, a new tenant or relevant list updates. OFSI distinguishes ongoing compliance with sanctions prohibitions from the reporting rules; it does not prescribe one universal screening frequency in its letting-agent FAQ.^[2]

For estate-agency sales, use a transaction-specific process

OFSI lists firms carrying out estate agency work as relevant firms for reporting. The 2025 letting-agent change should not be read as the date sanctions responsibilities first arose for property sales.^[4]

For a sale, our suggested review map starts with the seller and buyer, then adds relevant corporate owners, representatives and funding or payment questions. Keep the estate agent’s record distinct from a solicitor’s review. A memorandum of sale or a message saying that another professional has completed checks is not, by itself, an explanation of what your agency has established.

Add a handover for material changes between the initial instruction and later transaction stages. If the proposed buyer changes from an individual to a company, identify the new contracting party and record the additional review. Decide who follows up unresolved questions with the buyer, seller or their representatives, rather than leaving several negotiators to assume someone else has done it.

Keep sanctions checks distinct from other property checks

Design your checklist with separate outcomes for sanctions review, identity verification, tenancy referencing and any other checks applicable to the transaction. This avoids a misleading “fully compliant” label when only one task has been completed. It also makes it easier to explain the service to a landlord or tenant.

A useful agency procedure can fit on one page: who to identify, when to review, who handles an alert, what action must wait and where the evidence goes. Test it using a fictional file before rolling it out. Ask a negotiator and a property manager to follow the same scenario; differences reveal where the handover needs work.

• Use the current source and retain the record of what was actually searched.
• Keep an unresolved review queue with named owners, rather than relying on inbox reminders.
• Document decisions about reporting and affected activity separately from raw search results.
• Review your process when guidance, agency services or payment arrangements change.