From 14 May 2025, in line with new regulations, letting agents must carry out Anti Money Laundering (AML) checks on all prospective tenants, guarantors and landlords and report any PEPS or Sanctions they may find to the OFSI (office of Financial Sanctions Implementation), regardless of the level of monthly rent.
This is a part of the UK government's efforts to strengthen compliance with financial sanctions and anti-money laundering (AML) laws. From this date onwards, Agents will need to verify the identity of tenants and landlords and check that they don’t appear on the UK’s financial sanctions list.
A suitable check should typically include:
Should any potential PEPS or sanctions be found against their tenants, guarantors or landlords or have any evidence or suspicions that a client has breached financial sanctions then they must report this to the OFSI.
Failing to do say may result in a heavy fine with penalties ranging between ranging from £1,500 to over £50,000.
In today's regulatory landscape, Anti-Money Laundering (AML) checks are crucial for agents to ensure compliance and mitigate risks. Other organisations governed by the same regulations may also need to conduct such checks and these include, Accountants and Tax Advisers, Estate Agents, Legal Professionals, Trust and Company Service Providers, Gaming and Casino Businesses, Luxury Goods and Art Dealers and Money Service Businesses. Anti-money laundering checks should be carried out at least once a year, but the frequency depends on the risk and the regulations in the industry.
Non-compliance with AML regulations carries serious repercussions for letting agents:
AML checks are identity verification processes used to establish whether an individual is involved in money laundering activities. These checks are a legal requirement for agents to undertake on customers as part of their anti-money laundering compliance efforts.
AML checks often overlap with Know Your Customer (KYC) verification processes. This part of the verification process is known as Know Your Customer (KYC).
LetHQ's AML checks provide a comprehensive and efficient solution for agents to ensure compliance and mitigate risks associated with money laundering. Powered by an industry, leading provider and leveraging the latest technology, LetHQ helps businesses streamline their operations and build trust with their customers and remain compliant.
For more information on LetHQ's AML checks and how they can protect you and your business, visit: https://lethq.co.uk/service/aml-anti-money-laundering-checks
LetHQ has been recognised for its excellence in tenant referencing, winning three consecutive awards at the ESTAS for the best tenant referencing company in the UK. Our commitment to quality and customer satisfaction is reflected in our 5-star reviews, highlighting our dedication to providing top-notch services to our clients.
A Digital Right to Rent Check is a streamlined method for verifying a tenant's legal status to rent property in the UK. This process involves an online verification of the tenant's immigration status, offering a simpler alternative to traditional, document-heavy checks. The aim is to ensure that landlords and letting agents can easily comply with legal requirements, maintaining the integrity of the UK's rental market.
Absolutely. The law requires that all prospective tenants, regardless of their background, undergo Right to Rent checks. This comprehensive approach is designed to prevent discrimination and ensure that everyone renting property in the UK has the legal right to do so. Skipping these checks is not just risky; it's a direct path to the severe penalties soon to increase.
The upcoming changes to penalties for non-compliance are stark. For the first time, landlords could face fines of up to £5,000 per tenant and £10,000 per occupier, a significant jump from the previous penalties. Repeat offences could see these fines double, emphasizing the government's serious stance on enforcing these regulations. The message is clear: the cost of overlooking Right to Rent checks is about to become much more significant.
Staying ahead of these changes is simpler than you might think. LetHQ offers a Digital Right to Rent Check service that is not only compliant with Home Office guidelines but is also quick, affordable, and straightforward. For just £3.49 + VAT, our checks can be initiated and completed by the applicant in mere minutes, using their own driving licence or passport for verification.
The responsibility of conducting Right to Rent checks falls squarely on the shoulders of landlords and letting agents. With the impending increase in fines, there's never been a more critical time to ensure that your processes are up to scratch. These checks are not just a bureaucratic hurdle; they are a legal requirement that serves a broader purpose in regulating the UK's rental market.
While the prospect of digital checks and the looming penalty increases may seem daunting, the solution need not be complicated. Our Digital Right to Rent service simplifies the compliance process, allowing you to focus on your business while ensuring that you stay on the right side of the law.
The enhanced penalties for non-compliance underline the importance of thorough tenant checks. It's not merely about avoiding fines; it's about contributing to a legal and fair rental ecosystem in the UK. Ensuring that your tenants have the right to rent not only protects you from penalties but also supports the broader community and national efforts to regulate immigration through the rental market.
Our Digital Right to Rent Check service is designed to offer peace of mind, ensuring that you remain compliant with minimal hassle. As the rules get stricter and the penalties steeper, having a reliable partner to ensure that you're always compliant is essential.
