New Anti-Money Laundering Rules for Landlords and Letting Agents
Anthony WhitefieldNews, Landlords
FAQs: Everything You Need to Know
Yes. The rules Anti-Money Laundering rules for landlords and letting agents apply to every rental, even if you know the tenant personally. It may feel unnecessary to check the identity of a friend, family member, or long-term acquaintance, but AML regulations do not make exceptions as it is to ensure AML compliance to the UK rental market. Even trusted tenants must have their ID verified and be screened against the UK sanctions list. Skipping these checks could result in fines or legal issues if a problem arises later.
All rentals, no matter the rent price, must follow AML rules for landlords and tenants. Previously, only high-value rentals (£8,300+/month) were subject to AML laws, but as of May 2025, all landlords and letting agents must comply, regardless of rental price. Even if you let out a single room in a shared house or a low-cost studio flat, you are legally required to verify identities, check the sanctions list, and keep proper records.
Use the UK government’s online search tool (it’s free and easy to use). Before signing a rental agreement, enter the tenant’s full name and date of birth into the official UK Sanctions List database provided by the Office of Financial Sanctions Implementation (OFSI). If you find a match, you must not proceed with the rental until you report it to the authorities and receive further instructions. Keeping a record of your search results is also essential for compliance.
This could be a red flag for money laundering! Always check where the money is coming from. Large cash payments, especially upfront, can be a sign that a tenant is using rental property to hide illegal money. Under the AML compliance to the UK rental market, landlords and agents must perform extra checks on tenants making unusually high payments. Ask for proof of funds (such as bank statements) and ensure the payment is coming from a legitimate source. If the tenant refuses to provide documentation, do not accept the cash and consider reporting it as suspicious activity.
Yes, the anti-money laundering rules for Landlords still applies to ensure AML compliance to the UK rental market. Even if you don’t use an agent, you must verify your tenant’s identity and check for sanctions. While letting agents have stricter compliance requirements, private landlords are still responsible for ensuring they do not rent to sanctioned individuals. If you fail to perform these checks and unknowingly rent to someone involved in financial crime, you could face serious legal consequences. It’s strongly recommended that private landlords follow the same verification steps as agents to stay compliant and protect their properties.
At least 5 years after the tenancy ends. Under AML rules, landlords and letting agents must store copies of tenant IDs, proof of address, and sanctions screening results for a minimum of five years. These records serve as evidence that the required checks were completed. Failing to maintain records could result in fines, and if audited, you may be asked to provide proof of compliance. Digital storage with encryption is recommended to keep documents secure.
You could be fined thousands of pounds or even face prison. The penalties for non-compliance are severe, with fines issued for each violation. In extreme cases, landlords and agents who knowingly rent to sanctioned individuals or assist in money laundering could face up to 7 years in prison. Ignorance of the law is not a valid defense, so it’s essential to take compliance seriously. By following the proper AML procedures, you can avoid legal trouble and protect your business.
