Majority of small letting agents comply with sanctions checks but large firms lag

Letting agents are being warned to follow the rules or face fines, as despite new sanctions checks coming into force, some are still not complying.

According to Goodlord, more than a quarter (28%) of large letting agencies (those with 11 or more staff) aren’t currently performing Politically Exposed Person (PEPs) and sanctions checks, even though the new rules have been in effect for almost six months.

Since May of this year, all letting agents have been required to check whether prospective tenants appear on the UK’s national financial sanctions list, as well as report any matches or potential concerns to the Office of Financial Sanctions Implementation (OFSI).

Previously, such checks were only required where monthly rents exceeded €10,000.

This year has thrown a lot at the industry

Failure to comply with the rules, even by mistake, could result in a fine of £10,000 for first-time offences and £20,000 for repeat offenders failing to adhere to the rules.

Kerry Aldridge, director of compliance, said: “This year has thrown a lot at the industry. From new compliance rules to the Renters’ Rights Bill, agents have had a huge amount to contend with and prepare for. But it’s still fairly shocking to see how many agencies, particularly those with larger operations, are playing such a risky game when it comes to PEPs and sanctions checks.

“With fines stretching into the thousands, over a quarter of agents are exposing themselves to a big financial threat at a time when many can least afford it. We recommend taking immediate action to upgrade processes and ensure your business isn’t vulnerable.”

However, small letting agencies have been faring better and complying with the rules, with 85% of agencies with only one to five staff members saying they are performing PEPs and sanctions checks on every tenant.