AML (Anti Money Laundering) Rules from 14 May 2025 (How to Comply)

AML — Anti Money Laundering & Sanctions Checks (May 2025)
✓ PIMS Compliance Guidance

From 14 May 2025, Anti-Money Laundering and financial sanctions rules apply across the rental sector. These are not optional checks — failure to comply can result in serious legal consequences.


What changed in May 2025?

Letting agents are now classified as “relevant firms” under UK financial sanctions rules. This means AML checks must be carried out on every tenancy, regardless of rent level. 

These checks apply to:

  • Landlords
  • Tenants
  • Guarantors
  • Adult occupiers

All parties must be screened against UK sanctions lists before the tenancy proceeds. :The UK Sanctions List and its search tool

What you must do

  • Verify identity of landlord and tenant
  • Check all parties against UK sanctions lists
  • Check guarantors where financially involved
  • Keep records of checks and outcomes
  • Report matches or suspicions to OFSI

If a sanctioned individual is identified, the tenancy cannot proceed without government approval. if the search returns a match then you are duty bound to report to HM Treasury - In such event just call your PIMS Helpline 0800 999 7467 consider submiting a Suspicious Activity Report to the National Crime Agency

PIMS warning — this is not just admin

AML failures are not technical breaches — they are treated as financial crime risks. The property sector is a known target for money laundering, and enforcement pressure is increasing. :contentReference[oaicite:3]{index=3}

  • Tenancy may be blocked
  • Funds may be frozen
  • Mandatory reporting obligations triggered
  • Regulatory penalties and reputational damage

Where landlords get caught out

1. Assuming the agent will deal with it

Even where an agent is involved, landlords should understand the compliance position. The liability may not sit entirely with the agent.

2. Skipping checks on guarantors

Guarantors are financially involved and must be checked. Ignoring this can invalidate the process.

3. Treating AML as a formality

AML checks must be documented and evidenced. A tick-box approach is not sufficient.

4. Proceeding despite concerns

If a red flag appears, proceeding with the tenancy may create serious legal exposure.

PIMS approach — compliance built into process

PIMS treats AML as part of the tenancy creation process, not an afterthought.

  • Integrated with tenant referencing
  • Includes guarantor checks
  • Creates a compliance record
  • Supports correct tenancy agreement setup

This helps ensure the tenancy is compliant before it is granted, not corrected afterwards.

Before granting a tenancy

Make sure the tenant, guarantor and landlord have been properly checked and the tenancy agreement is created correctly.

PIMS final rule:

Do not treat AML as paperwork. It is a legal compliance obligation. Check first, document properly, and only proceed when satisfied.