Sanctions checking – What you must know
12/09/2025
On the 14th of May this year, it became a requirement to report any prospective tenants or landlords found to be listed on the UK Sanctions List. Whilst this may seem like more checks and policing primarily for agents to carry out, landlords should also expect more checks on them by their agent.
These new requirements fall out of the Sanctions and Anti-Money Laundering Act 2018 and were brought in by The Sanctions (EU Exit) (Miscellaneous Amendments) (No. 2) Regulations 2024. The Act imposed reporting obligations on ‘relevant firms’. These more recent regulations made letting agents in England and Wales ‘relevant firms’, meaning that we as letting agents now have sanctions list reporting obligations.
So what’s it all about?
The reason for imposing sanctions is to help the UK meet its foreign policy and national security aims, as well as to protect the integrity of its financial system.
Compliance comes in two parts. The first is to establish that a person is not what is known as a ‘designated person’ on the UK Sanctions List. To show due diligence in this regard is to carry out checks on individuals and entities. Secondly, if someone is found on the list, or if there is reasonable cause to believe that a breach has occurred, then a report must be made to OFSI (The Office for Sanctions Implementation).
Someone may be on the UK Sanctions List, for example, because of criminal or terrorist activity either in the UK or overseas. A person or an entity—such as a company, a trust, a charity, or indeed a ship—may be placed on the list by, for example, the UK Government or the United Nations. There are, for instance, many people or entities on the register from Russia, partly in response to the invasion of Ukraine. The sanctions imposed may be in the form of a travel ban, an asset freeze, or a ban on being a company director. The list tends to grow, not shrink, at least for now, and there are currently over 5,000 entries. Most countries will have a sanctions list, but we are specifically concerned about those found on the UK Sanctions List.
The majority of designated persons or entities will be from overseas, but this does not mean that a UK person or entity cannot be on the list.
What should landlords expect?
From the 14th of May 2025, agents must carry out sanctions checks on new landlords when instructed. Agents have to do these checks when taking on new landlords and at other times specified in the legislation.
Checks will need to be made upon each joint landlord, meaning that evidence of ownership—such as a copy of the deeds or a Land Registry check—will be necessary. Where a landlord is not the owner of the property, for example under a rent-to-rent agreement, the right to let out a property must be validated. This might be evidence that they are permitted to sublet a property under a tenancy agreement.
Where the landlord is a company or other entity (a company, trust, or charity), then the entity and any beneficial owners, directors, or trustees with control or influence must be checked. This links back closely to anti-money laundering requirements to register beneficial ownership information with the Land Registry.
In order to ensure that searches of the sanctions list are effective, agents will require the full names of each landlord or trustee. Agents may require further identifying information should a potential match be found.
Tenant checks
Prospective tenants must also be checked when they are ‘in the process of concluding an agreement’. For new tenants, this typically means they have had an offer accepted by a landlord. Many referencing companies now include a sanctions check as part of their process. However, it is also lawful for an agent to check the consolidated sanctions list directly. Checks may additionally be required on associated persons—such as guarantors or permitted occupiers—since they may be funding the tenancy.
Reporting effects
When a report is made that someone on the sanctions list is identified, or when a suspected breach is identified, it will be up to OFSI to decide what the agent may or may not do. They may require the agent to desist from any further dealings with the person or entity.
Whatever the response, there will be a delay to either concluding a tenancy or moving forward with the landlord’s instructions.
These new requirements fall out of the Sanctions and Anti-Money Laundering Act 2018 and were brought in by The Sanctions (EU Exit) (Miscellaneous Amendments) (No. 2) Regulations 2024. The Act imposed reporting obligations on ‘relevant firms’. These more recent regulations made letting agents in England and Wales ‘relevant firms’, meaning that we as letting agents now have sanctions list reporting obligations.
So what’s it all about?
The reason for imposing sanctions is to help the UK meet its foreign policy and national security aims, as well as to protect the integrity of its financial system.
Compliance comes in two parts. The first is to establish that a person is not what is known as a ‘designated person’ on the UK Sanctions List. To show due diligence in this regard is to carry out checks on individuals and entities. Secondly, if someone is found on the list, or if there is reasonable cause to believe that a breach has occurred, then a report must be made to OFSI (The Office for Sanctions Implementation).
Someone may be on the UK Sanctions List, for example, because of criminal or terrorist activity either in the UK or overseas. A person or an entity—such as a company, a trust, a charity, or indeed a ship—may be placed on the list by, for example, the UK Government or the United Nations. There are, for instance, many people or entities on the register from Russia, partly in response to the invasion of Ukraine. The sanctions imposed may be in the form of a travel ban, an asset freeze, or a ban on being a company director. The list tends to grow, not shrink, at least for now, and there are currently over 5,000 entries. Most countries will have a sanctions list, but we are specifically concerned about those found on the UK Sanctions List.
The majority of designated persons or entities will be from overseas, but this does not mean that a UK person or entity cannot be on the list.
What should landlords expect?
From the 14th of May 2025, agents must carry out sanctions checks on new landlords when instructed. Agents have to do these checks when taking on new landlords and at other times specified in the legislation.
Checks will need to be made upon each joint landlord, meaning that evidence of ownership—such as a copy of the deeds or a Land Registry check—will be necessary. Where a landlord is not the owner of the property, for example under a rent-to-rent agreement, the right to let out a property must be validated. This might be evidence that they are permitted to sublet a property under a tenancy agreement.
Where the landlord is a company or other entity (a company, trust, or charity), then the entity and any beneficial owners, directors, or trustees with control or influence must be checked. This links back closely to anti-money laundering requirements to register beneficial ownership information with the Land Registry.
In order to ensure that searches of the sanctions list are effective, agents will require the full names of each landlord or trustee. Agents may require further identifying information should a potential match be found.
Tenant checks
Prospective tenants must also be checked when they are ‘in the process of concluding an agreement’. For new tenants, this typically means they have had an offer accepted by a landlord. Many referencing companies now include a sanctions check as part of their process. However, it is also lawful for an agent to check the consolidated sanctions list directly. Checks may additionally be required on associated persons—such as guarantors or permitted occupiers—since they may be funding the tenancy.
Reporting effects
When a report is made that someone on the sanctions list is identified, or when a suspected breach is identified, it will be up to OFSI to decide what the agent may or may not do. They may require the agent to desist from any further dealings with the person or entity.
Whatever the response, there will be a delay to either concluding a tenancy or moving forward with the landlord’s instructions.
