New Legal Requirement for AML Checks on Rental Properties in Wales: What You Need to Know
Starting 14 May 2025, new legal requirements come into force across the rental sector in Wales. Anti-Money Laundering (AML) checks will become mandatory for all rental transactions. This law, introduced by the UK Government, not letting agents, is aimed at combating financial crime and increasing transparency in the property market.
What Are AML Checks?
AML checks are procedures designed to prevent criminals from using property rentals to disguise illegally obtained money. These checks involve verifying the identity of all parties involved in a tenancy and reviewing the source of funds used for rental payments. The goal is to ensure rental income comes from legitimate sources and to protect the integrity of the housing market.
Why Are They Being Introduced?
The legislation aligns the rental sector with both the sales industry and international AML standards. The aim is to:
• Prevent criminals from laundering money through rental properties
• Improve transparency by clearly identifying all parties involved
• Strengthen trust in the rental market
• Meet global anti-money laundering benchmarks
Not an Agent’s Choice – It’s the Law
Letting agents are legally required to carry out AML checks, but this is not their own policy, it is national legislation. Agents asking for documentation are fulfilling a legal obligation, and all parties must comply. Refusal to cooperate could delay the marketing of a property or lead to legal penalties.
What It Means for Landlords
Before a property can be listed, landlords must complete AML verification. This secure, online process will involve submitting:
• Proof of identity (e.g., passport or driving licence)
• Proof of address (e.g., recent utility bill or bank statement)
• Property ownership details
Letting agents like Dawsons will guide landlords through each step to ensure minimal disruption.
What It Means for Contract-Holders (Tenants)
Prospective tenants, now legally referred to as contract-holders in Wales, must also undergo AML checks. This includes providing:
• Proof of identity
• Proof of address
• Evidence of income or source of rental funds (e.g., payslips or bank statements)
All information will be handled securely and confidentially. A Shared Responsibility for a Safer Market.
While these changes may seem like extra admin, they are vital for protecting the rental market from financial misuse. By cooperating, landlords, tenants, and agents help build a more secure, trustworthy, and legally compliant rental environment.
At Dawsons, we’re ready to support you through the process. Our AML checks are straightforward, efficient, and designed to avoid unnecessary delays.
Need Help? If you have questions about how these new regulations impact you, our team is here to help. Remember, from 14 May 2025, AML COMPLIANCE IS A LEGAL REQUIREMENT, not a choice. We’re committed to making the process as smooth as possible for everyone involved.
TO CONTACT ANY OF OUR TEAM: CLICK HERE