AML changes for Landlords and Agents May 25
Landlords!
Are you aware of the AML changes in May?
From May 14, 2025, landlords and letting agents in England will need to perform enhanced Anti-Money Laundering (AML) checks on all prospective tenants and guarantors. These checks will include identity verification, and reporting any Politically Exposed Persons (PEPs) or sanctions to the Office of Financial Sanctions Implementation (OFSI).
Identity Verification:
Landlords and agents must verify the identity of every adult tenant who will be living in the property.
PEP and Sanctions Checks:
Landlords and agents need to check if potential tenants or landlords are sanctioned or Politically Exposed Persons (PEPs).
Reporting:
Any identified PEPs or sanctions must be reported to the OFSI.
Risk Assessment:
Landlords and agents must assess the risk of money laundering associated with each client or transaction.
Record Keeping:
All identity documents and verification checks must be stored for at least five years.
Consequences of Non-Compliance:
Failure to comply with these regulations can result in fines, ranging from £1,500 to over £50,000.
Financial sanctions
Landlords and letting agents need to meet new reporting obligations as part of the UK Financial Sanctions Regulations – with the new rules coming on 14 May, what does this mean?
Financial sanctions can be used by the UK Government to restrict a ‘designated person’s’ financial affairs. This could include, for example, freezing their assets, or restricting their investment – and are a tool that can be used where there are concerns over national security, the UK financial system, or if there is a foreign policy issue.
The sanctions can apply to anyone within the territory of the UK and to all UK citizens, wherever they are in the world.
Under the regulations, if a Landlord or agent has reasonable cause to suspect’ that someone is either a designated person or has committed a breach of financial sanctions regulations must report it to the Office of Financial Sanctions Implementation (OFSI) as soon as possible.
When reporting, you must include:
- the information or other matter on which the knowledge or suspicion is based
- any information you hold about the person or designated person by which they can be identified
- if you know or have reasonable cause to suspect that a person is a designated person and that person is a customer of your firm, you must also state the nature and amount or quantity of any funds or economic resources held by you for that customer.
When do obligations begin?
You don’t have to report a prospective tenant as being someone who is a designated person or has breached financial sanctions until such a point as the prospective tenant’s offer is accepted. This is due to the large number of prospective tenants that may be encountered and could leave Landlords and agents with a lot of reporting work to do
What are financial sanctions?
Financial sanctions help the UK meet its foreign policy and national security aims, as well as protect the integrity of its financial system. Financial sanctions include restrictions on designated persons, such as freezing financial assets, as well as wider restrictions on investment and financial services. UK financial sanctions apply to all persons within the territory and territorial sea of the UK and to all UK persons, wherever they are in the world.
Under the reporting obligations, you are required to report to OFSI as soon as practicable if it known or have reasonable cause to suspect that a person (i) is a designated person; or (ii) has committed a breach of financial sanctions regulations. Where the designated person is a customer, you must also report to OFSI the nature and amount or quantity of any funds or economic resources held for the customer at the time when you first had the knowledge or suspicion
Call or email us for further information 020 84002726 info@glaproperty.com
