Sanctions, Suspicions & Section 21s: What Commercial Agents Need to Know Before 14 May  

Sanctions, Suspicions & Section 21s: What Commercial Agents Need to Know Before 14 May  

Attention Free CPD!  

Sanctions, Suspicions & Section 21s: What Commercial Agents Need to Know Before 14 May  

By CAPP Member Robbie Clarke BA Commercial April 2025 

First it was, EPCs then AML checks, now it’s sanctions screening. At this rate, the government might as well send us a badge and call us HMRC-2 point 0! 

Yes, while taxes go up, our role as a commercial agents is getting remarkably close to working for the Treasury. Only without the pension or power to print money. 

From 14 May 2025, commercial letting agents officially join the front line in the UK’s fight against international crime — not by chasing spies or digging up offshore accounts, but by checking whether that new tenant for Unit 4B might be on a government sanctions list. 

What’s Actually Happening? 

As of May, if you’re carrying out letting agency work for commercial tenancies of a month or more, you’ll be classified as a “relevant firm” under UK financial sanctions regulations. 

In plain English:
We now have a legal obligation to report it if you know (or even suspect) that one of our landlords, tenants, or their secret offshore cousins is a designated person under UK sanctions. 

 

“Designated person”? Sounds ominous. 

It is. These are individuals, companies or organisations the UK government has decided are best avoided — often for reasons involving global security, corruption, or generally being up to no good. 

There’s a full (and regularly updated) list here:
👉 UK Consolidated Sanctions List https://www.gov.uk/government/publications/financial-sanctions-consolidated-list-of-targets/consolidated-list-of-targets  

No need to memorise it — just know how to check against it when needed. 

 

Who Exactly Needs to Do What? 

If you’re involved in: 

  • Sourcing tenants or landlords, 
  • Negotiating terms, or 
  • Concluding commercial tenancy agreements (1 month+), 

Then congratulations: you’ve just gained a few extra responsibilities. 

You now need to: 

  1. Screen clients (landlords and tenants/purchasers) against the sanctions list. 
  1. Report to OFSI if you know or suspect a client is sanctioned, or has breached sanctions. 
  1. Do this as soon as practicable, not after you’ve had your morning coffee and sorted your emails. 

 

Wait – Do I Need to Run AML Checks on Everyone Now? 

Short answer: Yes —AML checks are required on every client, buyer and tenant if over (lettings) €10,000 approx. £8,500+ per month. 

While the new sanctions rules are technically separate from the Money Laundering Regulations, the practical reality is you can’t screen someone against the sanctions list without knowing who they actually are. 

So, to comply, we do the following: 

  • Identify the individual or beneficial owner (just like under AML rules), 
  • Check their details against the UK Sanctions List, (done via most standard credit check programmes).  
  • Keep a record of the checks and any suspicions. 

In other words, if it walks like an AML check and quacks like an AML check… it’s pretty much an AML check. 

 

Does This Affect Property Management Too? 

Only if you’re actively involved in letting the property. If you’re just managing the service charge and fixing the boiler, you’re off the hook — for now. 

However, if you: 

  • Took part in the original letting, 
  • Are renewing or renegotiating terms, 
  • Or are being re-instructed to find a tenant, 

…then yes, you’re back in the spotlight. 

 

 

What Should We Be Doing Now? 

Here’s your handy to-do list (without the panic): 

  1. Start Sanctions Screening
  • Screen all clients (landlords & tenants) involved in commercial lets of 1 month+. 
  • Use Credit Check Programmes to check individuals against the UK Consolidated Sanctions List.  
  1. Update Your Onboarding Process
  • Make sure to collect enough information to actually run a sanctions check. 
  • Consider dropping a sanctions clause into your standard ToE. 
  1. Train Your Team
  • Everyone involved in lettings should understand: 
  • What sanctions are, 
  • When and how to report, 
  • That we’re not MI5 (but it’s starting to feel that way). 
  1. Put a Reporting Process in Place
  • Decide who handles internal escalations. 
  1. Document Everything
  • Keep a clear trail of checks and decisions. 
  • Because if a regulator ever comes knocking, “I think Mitch said he looked into it” won’t cut it. 

 

In summary we’re not being asked to become international spies. But we are being asked to pay attention, run some basic checks, and report concerns if they arise. 

Think of it as another layer of due diligence — like checking planning permission, or trying to decipher a client’s “rough floor plan” that looks like it was drawn on a napkin. 

If nothing else, it’s another acronym for the office whiteboard. 

OFSI: Office of ‘Find-it-out-So-we-don’t-get-In-trouble’. 

 

Robbie Clarke MRICS

Director

BA Commercial