OFSI Guidance, Guarantors, and Permitted Occupiers

I have some clients who have been advised that guarantors should also be screened as part of the changes on 14th May. The OFSI guidance specifically only refers to landlords and tenants, but I can also see the point. Let’s imagine a scenario:

For privacies sake lets call him Vladimir P (no, that’s too obvious. Lets say Mr V. Putin) wants to rent a property in London. He will appear on the sanctioned individuals database (I have checked, he is there) so won’t be able to become a tenant.

But what if Mr Putin decided to find literally anybody who is not on the list to apply for the property for them. That person doesn’t need to pass financial referencing because Mr Putin can stand as guarantor. The tenancy is set up and Mr Putin moves into the property because that person allows him to.

That person then fails to pay rent and so the letting agent asks Mr Putin to pay. Mr Putin is feeling generous and so decides to pay and this process repeats until Mr Putin decides to leave (apparently he has some urgent business to attend to in his home country).

In this scenario Mr Putin is effectively a tenant but did not require screening because the OFSI guidance did not specifically require it to be done.

I think screening guarantors may be well sensible given the tools that exist to sanctioned individuals to benefit from property whilst not being named as a tenant. The same logic could apply to permitted occupiers.

Note: I previously posted about confusion with the OFSI guidance or what ‘instructions’ from a tenant might mean. I have emailed them for clarity but that was three weeks ago and nothing has come back. Probably best to err on the side of caution with that as well and assume that any tenant taking a tenancy needs to be checked.