Letting Agents
A new obligation most letting agents do not yet know about.
From 14 May 2025, every letting agent in the UK must report to OFSI if they know or suspect a client has breached financial sanctions — regardless of rental value. Most agents we speak to did not know this obligation existed.
The Renters Rights Act 2025 came into force on 1 May 2026. Undocumented tenancy decisions now create discrimination and regulatory exposure that did not exist in the same form before. The question is whether your file proves what you decided — when you decided it.
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The regulatory landscape
Letting agents who meet the MLR 2017 thresholds are supervised by HMRC for anti-money laundering in the same way as estate agents: firm-wide risk assessment, customer due diligence where required, SAR decision logging, training, and five-year retention. Inspectors still ask the same blunt question — is the risk assessment yours, or a template with your logo on it?
From 14 May 2025, OFSI's sanctions reporting obligation applies to all letting agents — not only those above a rental value threshold. You must screen against the UK Sanctions List (the OFSI Consolidated List closed 28 January 2026) and retain evidence of those screens. A policy without dated records is not a defence when OFSI or HMRC asks what you did in a specific case.
The Renters Rights Act 2025 reshapes how tenancy decisions may be challenged. Where applicants dispute refusals or differential treatment, investigators will look for contemporaneous reasoning — who saw what information, what risk factors were weighed, and why the outcome was lawful and fair.
The Digital Markets, Competition and Consumers Act 2024 creates CMA enforcement tools that already bite in estate agency markets; letting agents operating at the intersection of property and consumer transparency should assume the same evidential discipline will apply to how material information and decisions are recorded.
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What regulators look for
HMRC inspections mirror estate agency practice: specificity of the firm-wide risk assessment, quality of CDD records and recorded risk reasoning, completeness of the SAR log (including decisions not to report), training evidence, and sanctions screening records tied to identifiable clients and dates.
For OFSI-related obligations, supervisors ask whether every relevant client was screened against the correct list version, whether reports were made as soon as practicable when required, and whether you can produce the trail without reconstructing it from memory.
Where tenancy decisions are challenged, regulators and courts ask what file existed on the day of the decision — not what was compiled after the fact. Undocumented rejections and informal WhatsApp chains are a growing source of enforcement and civil exposure.
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What Evidentia gives you
Sanctions screening log
Every landlord and tenant screened against the UK Sanctions List with list version, date, outcome and reference — structured for OFSI and HMRC scrutiny from day one.
Tenancy decision records
Documented reasoning at the moment you accept, decline, or impose conditions — the contemporaneous file the Renters Rights Act era expects.
Inspection-ready AML pack
Risk assessment trail, CDD reasoning, SAR determinations and training evidence — the same HMRC-ready posture estate agents are already being judged on.
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The evidence gap
Most letting agents we speak to operate sensible day-to-day processes. They know their landlords and tenants. They follow internal checks. But the reasoning behind sanctions screens, SAR calls and tenancy outcomes often lives in conversation — not in a sealed, dated record.
When a letter arrives from HMRC or a challenge lands from an applicant or regulator, reconstruction under pressure is not evidence. It is exposure — especially where the law now expects you to show what you knew and did at the time.
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Key enforcement facts
OFSI sanctions reporting applies to all letting agents from 14 May 2025 — regardless of rental value.
The Renters Rights Act 2025 is in force from 1 May 2026 — undocumented tenancy decisions increase discrimination and regulatory risk.
The UK Sanctions List is the authoritative screening source from 28 January 2026 — records must reflect list version and outcome.
Find out whether your current approach would withstand scrutiny.
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