Are you renting out a Residential Property in England? If so, are you aware of the new regulations?
PEP (Politically Exposed Person) and sanction checks are crucial compliance measures that help businesses mitigate the risk of dealing with individuals or entities involved in financial crime or sanctioned activities. These checks involve verifying a client or customer against watchlists, identifying PEPs, and assessing potential risks.
What are PEPs and Sanctions Checks?
- Politically Exposed Persons (PEPs): PEPs are individuals with significant political influence or close associations with high-ranking government officials. They are considered higher risk due to the potential for corruption, bribery, and money laundering.
- Sanctions Checks: These checks involve screening individuals and entities against global and domestic sanctions lists to ensure they are not involved in any sanctioned activities. Sanctions can be imposed by governments or international bodies for various reasons, such as terrorism, human rights violations, or drug trafficking.
Why are PEP and Sanction Checks Important?
- AML Compliance: PEP and sanction checks are essential for complying with Anti-Money Laundering (AML) regulations.
- Risk Mitigation: They help identify and mitigate risks associated with clients, protecting businesses from legal, financial, and reputational damage.
- Fraud Prevention: By identifying potential risks, these checks help prevent financial crimes such as bribery, corruption, and money laundering.
How are PEP and Sanction Checks Conducted?
- Third-Party Data: Businesses rely on third-party data providers and solutions to conduct PEP and sanction checks.
- Watchlists and Databases: These checks involve comparing client data against various watchlists and databases.
- Automated Screening: Automated screening tools and platforms are used to streamline the process and ensure efficiency.
- Continuous Monitoring: Ongoing monitoring and due diligence are crucial to ensure compliance, as sanctions lists and PEP statuses can change.
Benefits of PEP and Sanction Checks:
- Improved Compliance: Ensures compliance with AML regulations and other relevant laws.
- Reduced Risk: Mitigates the risk of engaging with high-risk individuals or entities.
- Enhanced Reputation: Protects a business’s reputation by preventing involvement in financial crime.
- Streamlined Onboarding: Efficiently identify and assess risks during the onboarding process.
Renters Rights Bill – Coming in late 2025
The Renters’ Rights Bill aims to overhaul the private rental sector in England, offering renters greater security and protection. Key changes include abolishing “no-fault” evictions, introducing a Decent Homes Standard, and applying Awaab’s Law to ensure landlords address health hazards promptly. The bill also seeks to create a more transparent and fairer rental market by requiring landlords to register their properties and making it illegal to discriminate against tenants.
Here’s a more detailed breakdown:
- Abolition of Section 21 Evictions: Landlords will no longer be able to evict tenants without a legitimate reason, providing renters with more stability.
- Periodic Tenancies: Fixed-term tenancies will be replaced with periodic tenancies, allowing tenants to end their tenancies with two months’ notice.
- Decent Homes Standard: All private rental properties will be required to meet a minimum standard of safety, warmth, and decency, according to LettingaProperty.com.
- Awaab’s Law: Landlords will be required to address serious health hazards like damp and mould within a specific timeframe, says LettingaProperty.com.
- Private Rented Sector Database: All landlords will be required to register themselves and their properties on a new digital database, making it easier for tenants to verify landlord legitimacy and ensure they are following regulations.
- Private Rented Sector Ombudsman: A new ombudsman service will be established to provide a quick, affordable, and binding dispute resolution between landlords and tenants.
- No Discrimination: It will be illegal for landlords and agents to discriminate against tenants based on their benefits or if they have children, according to LettingaProperty.com.
- End to Rental Bidding Wars: Landlords will no longer be able to encourage or accept offers above the listed price, says LettingaProperty.com.
- Strengthened Enforcement: Local councils will have strengthened enforcement powers to identify, penalize, and remove rogue landlords more effectively.
- Tenants and Pets: Landlords will be required to reasonably consider tenant requests to keep pets, and can only ask for a security deposit to cover potential damage, notes LettingaProperty.com.
MEES Regulations – Coming in 2028 for new tenancies and 2030 for all tenancies
The Minimum Energy Efficiency Standards (MEES) regulations, in short, require landlords of both domestic and commercial properties to ensure their rental properties meet a minimum energy efficiency standard, specifically an EPC rating of E or higher. Failure to comply can result in penalties, and landlords may need to make improvements or register an exemption.
Here’s a more detailed breakdown:
Key Aspects of MEES:
- Minimum Standard: MEES establishes a minimum energy efficiency level for private rented properties, requiring them to have an EPC rating of E or better.
- Impact on Landlords: Landlords are responsible for ensuring their properties meet this minimum standard and for obtaining a valid EPC for each property.
- Consequences of Non-Compliance: Failure to comply with MEES can result in fines, typically up to £5,000 per property, depending on the specific offense.
- Exemptions: There are several exemptions to the MEES requirements, which landlords can register to avoid the obligation to improve their property.
- Government Goals: The government aims to have a large number of private rented homes upgraded to EPC Band C by 2030, where practical, cost-effective, and affordable.
- Enforcement: Councils and other enforcement authorities will monitor compliance with MEES regulations and can issue penalties to landlords who are not meeting the requirements.
Important Considerations:
- EPC Ratings: Understanding the EPC rating system is crucial for compliance with MEES, as it measures a building’s energy efficiency.
- Energy Efficiency Improvements: Landlords may need to make improvements to their properties to achieve an EPC rating of E or higher.
- Exemptions: It’s important to understand the various exemptions available under MEES to determine if they apply to a specific property.
In essence, MEES aims to improve the energy efficiency of private rented properties and reduce carbon emissions, with landlords playing a key role in ensuring compliance.
The UK government has proposed significant changes to EPC requirements set to take effect in 2028:
- Higher minimum standard: The minimum EPC rating for rental properties is expected to increase from E to C. This represents a substantial jump in energy efficiency standards.
- Cost cap adjustment: The cost cap for required improvements may increase from the current £3,500 to potentially £15,000, meaning landlords might need to invest significantly more in property upgrades.
- Tighter compliance timeline: New tenancies may need to comply by 2028, with all existing tenancies meeting the new standard by 2030.
There are strict penalties and even a risk of imprisonment for non-compliance to these new regulations. Ensure you are safe by using a reputable letting agency like Woods Properties and Lettings to find you a tenant and manage your letting.
For further information contact Nigel Woods at Woods Properties and Lettings on 01825 768657 or 07789 695432.