Landlords and letting agents are being warned to ensure they carry out new sanctions checks from today, or face huge fines.

Previously, checks on tenancies for properties where monthly rents were above £8,300 was necessary, which equates to just 2.5% of the market.

But now agents and landlords have to follow the process to ensure a tenant is not on the UK sanctions list on every single deal.

£1m fines

Anyone caught not complying with the new rules, which mean agents have to run checks on landlords as well, could be hit with a fine of up to £1 million, and a criminal prosecution.

The latest Government figures show that, even before the changes, agents were fined £3 million in just 12 months for a total of 468 breaches, with the average fine just over £4,000.

This week is critical for letting agents.”

Nishma Parekh, Director of Referencing at tech lettings platform Goodlord, says: “This week is critical for letting agents. New rules around sanctions checks represent a major shift for the industry and it would be very easy for letting agents to unwittingly fall foul of them.

“Every single landlord and tenant, no matter the rental value, must now go through sanctions checks,” she says.

Ducks in a row

Four in five landlords are unprepared for the changes, so “it’s vital that they get their ducks in a row immediately if they want to stay on the right side of the law,” she says.

“If they fail to comply – even if it’s a genuine mistake – they could be facing unfathomable fines of up to £1m.”

John Reynolds, co-founder and chief operating officer at Coadjute, adds: “Today marks the start of changes to financial sanctions reporting obligations for letting agents and failure to align with these updated provisions could not only result in fines but also damage to reputations.

“However, there is no cause to panic. Although letting agents will need to ensure they comply with the new requirements there are steps they can take to make life easier for themselves.

“To reduce the work required, they should consider reviewing their existing due diligence procedures, strengthening their record-keeping, providing employee training, and updating their legal frameworks.

“Embracing digital solutions for compliance management can streamline processes and even earn revenue for each check, transforming an obligation into an opportunity. Technology can serve as a key ally in mitigating risk and ensuring ongoing adherence to regulations.”

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