New Legislation as of the 14th of May 2025

New regulation introduced in May 2025 means agents need to conduct sanctions checks on every tenant and landlord by law.

Before May 14 2025, letting agents only needed to conduct sanctions checks where monthly rents exceeded €10,000 per month (approximately £8,300).

However, from this date onwards, the threshold will be removed, and agents will be subject to reporting obligations as “relevant firms” under financial sanctions laws. 

As a result, sanctions checks are mandatory for all prospective:

• Landlords - at the point of instruction
• Tenants - before concluding a letting agreement

Why are the changes to sanctions regulation happening?

Criminals often look to evade sanctions or create complex financial trails that are hard to trace. By removing the €10,000 per month threshold, the Government is closing a loophole and making sure that no sanctioned individuals can enter into rental agreements unnoticed. 

At Abacus Homes we have already onboarded specialist software to carry out these checks and remain 100% compliant.

Landlords

Anti-money laundering (AML Checks)

The checks cover: 

• Identity validation
• PEPs and financial sanctions
• Mortality and address checks
• Adverse media screening

Tenants

Automated PEPs and sanctions checks

Tenants and guarantors are automatically screened during our tenant referencing process, cutting out the hassle of going back and forth with OFSI.

generating a complete audit trail for our records. 

Do I need to screen existing tenants and landlords?

Legally, the rules only apply to prospective tenants and landlords.

However, OFSI has suggested that sanctions checks should always have taken place. So, while not required, checking in-situ parties is advisable.

Hefty financial penalties

Failing to comply with the obligations can result in fines "which will be the greater of £1M or 50% of the value of breach", according to the Government.

For example, a London-based company was fined £1.4M for failing to conduct proper risk assessments, implement adequate anti-money laundering controls, and perform due diligence checks.

In 2024 alone, HMRC issued over £1.6M in fines to 254 estate agents for failing to register for AML supervision.

Administrative burden

Agents are already juggling a growing list of compliance requirements, from changes introduced by Renter’s Rights Bill to shifting Energy Performance Certificate (EPC) regulations.

The removal of the sanctions check threshold means we need to jump through another hoop to stay on the right side of the law.