Sanction checks: Checking your tenants

12th May 2025

In a significant regulatory update for the lettings industry, as of 14th May 2025, all landlords and tenants must now be checked against the UK Financial Sanctions List, regardless of rental value. This change forms part of a wider government initiative to clamp down on financial crime, money laundering, and the misuse of UK property. Previously, sanction checks were only required in limited high-risk scenarios — most notably where tenants were entering agreements with monthly rents exceeding £10,000. That threshold has now been removed.

At Coapt, we are already prepared for this regulation change, here’s a quick breakdown on everything you need to know about these checks and how we are staying compliant.

What are sanction checks?

To put it simply, the sanction checks are to confirm whether an individual/and or company appear on His Majesty’s Treasury Financial Sanctions List. This information is maintained by HMT’s Office of Financial Sanctions Implementation (OFSI).  Here’s some examples of who might appear on this list:

• Targets of UK financial sanctions (often aligned with UK, EU, and UN sanctions).
• Organisations or individuals whose assets have been frozen and who face restrictions on financial services.
• Individuals found guilty of embezzling public funds.
• Individuals or organisations convicted of money laundering offences.
• Individuals or organisations involved in terrorist activities, recruitment, and financing.
• Business figures involved in financially assisting sanctioned states, e.g Russia and North Korea.

How to we complete these checks?

At Coapt, we’ve already integrated sanction checks into our internal processes to ensure full compliance ahead of the 14th of May deadline. Once a tenant’s offer on a property has been accepted, we run a sanction check against each tenant and their Guarantors (if applicable).

Our system continues monitoring these individuals for the duration of their tenancy. This means we’ll be notified if someone is added to the sanctions list during the fixed term.

All sanction check reports are securely saved to customer files to comply with potential audits from OFSI.

What happens if someone appears on this list?

If an individual has a positive match, we are required to immediately report this to OFSI. As the letting agent, it’s our legal responsibility to ensure this is done without delay and in accordance with OFSI regulations.

Whether we can proceed to let the property to that individual will then be determined in consultation with OFSI. Depending on the nature of the sanction, the landlord may be contacted directly as part of the decision-making process.

What if you don’t complete these checks?

If a letting agent is found to have not completed checks on any tenant or Landlord, or if they have completed a check which has made a positive match on the sanction list, they can be subject to a financial penalty or criminal prosecution. It may vary depending on the severity of the offence, but in instances where agents have not carried out the mandatory checks, there have been fines in excess of £1,000,000. Now these checks are mandatory for everyone, we can expect the OFSI to be more thorough with more regular audits.

And it’s not just agents at risk; landlords can be penalised if they are found complicit in the failure to complete mandatory checks. In conclusion: no one should be taking that risk.

What do you need to do?

The good news is you don’t need to do anything! We will complete all tenant and Guarantor sanction checks, no matter your management agreement with us. It is our legal obligation to make sure these checks are done as a part of our role in finding your tenants. You can be reassured that these checks are now a firm part of our letting process and everything is taken care of.

We understand you might have some questions surrounding these checks, and how it might affect letting your property. We are always here to help, so please don’t hesitate to get in touch. The team can talk you through any queries or concerns you might have and will reassure you that we are keeping our lets compliant!

Written by Emma Williamson, Admin Manager