"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"
- Kerry Aldridge - Goodlord
A significant number of letting agencies are failing to comply with new regulations, putting themselves at risk of fines that could reach tens of thousands of pounds, according to Goodlord’s State of the Lettings Industry Survey.
The survey, which gathered responses from over 1,700 letting agents and landlords, found that more than a quarter (28%) of large agencies—defined as those with 11 or more staff—are not carrying out Politically Exposed Person (PEPs) and sanctions checks. This is despite new rules that came into effect almost six months ago.
Since May, all letting agents are required to check whether prospective tenants appear on the UK’s national financial sanctions list and to report any matches or concerns to the Office of Financial Sanctions Implementation (OFSI). Previously, these checks were only necessary for tenants paying monthly rents over €10,000.
Despite the wider requirement, 28% of large agencies are failing to comply, leaving themselves exposed to fines of £10,000 for first offences and £20,000 for repeat offences.
Smaller agencies appear to be more compliant. According to the survey, 85% of agencies with 1–5 staff members said they perform PEPs and sanctions checks on every tenant.
“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," comments Kerry Aldridge, director of compliance.
She added, "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.”
