Lettings Agency Anti-Money Laundering Policy

PROP.AML.HV.02

This Anti-Money Laundering (AML)Policy is designed for residential Lettings Agency businesses. Its purpose is to raise awareness of money laundering risks, help prevent illicit activity, and guide staff in responding appropriately to any suspicions of money laundering. A copy of the anti-money laundering policy must be given to all staff. Staff must also receive anti-money laundering training. The anti-money laundering policy should supplement staff training. This policy should be reviewed regularly to ensure that it complies with HM Revenue & Customs (HMRC) guidance and HMRC recommend this is done annually.

Important Notice: These AML templates are an EXAMPLE ONLY and are intended as a starting point. You must tailor them to reflect your business’s size, structure, and risk profile. You should always refer to the relevant anti-money laundering regulations and specific HMRC guidance. If you are unsure how to edit or adapt these templates, you must seek professional legal advice. This template does not replace your responsibility to ensure you are adequately trained in AML compliance or to consult and adhere to the official guidance issued by HM Revenue and Customs (HMRC) and HM Treasury.

Money Laundering

Money laundering involves concealing the origins of criminal proceeds to make them appear legitimate. The property sector is attractive to money launders because beneficial ownership can be obscured through corporate entities or overseas trusts.

Letting Agents are often the first port of call in property transactions and so they are best places to identity and verify the parties to a transaction and report any suspicious activity at the outset of the transaction.

The Regulations

Lettings Agents are regulated by HMRC and must comply with The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 as amended by The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (collectively, ‘the Regulations’).

The Regulations require Estate and Lettings Agencies to take appropriate measures to prevent their services from being used for money laundering and terrorist financing. These obligations include:

Implementing appropriate anti-money laundering (AML) policies and procedures;
Conducting risk assessments;
Carrying out customer due diligence;
Maintaining comprehensive records; and
Reporting any suspicious activity

Financial Sanctions Checks for Lettings Agents

Financial sanctions are imposed by the United Nations or United Kingdom to restrict access to certain financial services, markets, and economic resources for specific individuals or entities. Lettings Agencies are obliged to understand and comply with financial sanctions requirements.

The Office of Financial Sanctions Implementation (OFSI), part of HM Treasury (the authority for the implementation of financial sanctions in the UK), maintains the official list of designated persons and issues guidance on sanctions compliance.

Currently, under the Regulations Lettings Agents are required to conduct sanctions checks where the monthly rents exceed 10,000 euros per month. However, from 14 May 2025, lettings agents will be classified as "relevant firms" under The Sanctions and Anti-Money Laundering Act 2018.

What Does This Mean For Lettings Agents?

In addition to ensuring compliance with AML regulations, Lettings Agents will be required to:

Conduct sanctions checks on all potential tenants, landlords and other relevant parties, regardless of rental value;
Check these parties against government sanctions lists before entering into contracts and accepting payments;
Report to the OFSI if they know, or suspect that a party is a designated person or has breached sanctions regulations. Reports are only required where the knowledge or suspicion arises in the course of conducting your business activities.

Failure to comply can result in significant financial penalties and imprisonment for up to seven years. The services provided by an Estate and Lettings Agencies can carry varying levels of risk. Agencies must assess and understand the specific risks that each customer presents.

Guidance

Reference can be made to the following for guidance on the Regulations and compliance:

Guidance Note: AML for Residential Estate and Lettings Agency

HMRC has produced specific guidance for both Estate and Letting agents concerning money laundering supervision. This should be consulted regularly and is available at: Estate and letting agency business guidance for money laundering supervision - GOV.UK (www.gov.uk).

HMRC’s tailored guidance for letting agents can be accessed here.

The OFSI has also published guidance for lettings agents and landlords: UK financial sanctions general guidance - GOV.UK

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