Almost half (46%) of 1,922 agents inspected in the 15 months up to June 2019 by local council trading standards officers, were non-compliant with either the Consumer Rights Act and/or the legislation on the redress scheme membership.
London borough trading standards teams have been increasingly active in tackling rogue letting agents in recent years, with over £1.2m of fines issued in the past 15 months and 14 criminal prosecutions, but dodgy agents are far too commonplace across London and private renters need to be very careful not to be ripped off.
We’re really pleased to see Trading Standards prosecuting bad practice in the industry; it’s the only way to clean up the sector and we’ve been calling for it for a long time.
People should remember that if they can’t see an agent’s fee template, CMP certificate and redress scheme membership prominently displayed in their office, that’s three laws that they have already broken.
This raises the question what other laws will that agent break? At that stage, a tenant should walk straight out and choose an ARLA Propertymark member where agents follow a strict code of conduct which puts the tenant first.
It’s also why we have been calling on the government to regulate letting agents and are pleased that plans are well underway for mandatory registration and training for all letting agents.
The Tenant Fees Act, which applies to tenancies signed since 1 June 2019 sets out the Government’s approach to banning letting fees for tenants. The key measures of the Act include:
- Tenancy Deposits must not exceed the equivalent of five weeks' rent (unless the annual rent exceeds £50,000 in which case deposits are capped at six weeks’ rent).
- Holding Deposits will be capped at no more than one week’s rent.
- The amount that can be charged for a change to a tenancy will be capped at £50 unless the landlord demonstrates that greater costs were incurred.
- The Consumer Rights Act 2015 is amended to specify that the letting agent transparency requirements should apply to third-party websites.
Alongside rent and deposits, agents and landlords will only be permitted to charge tenants fees associated with:
- A change or early termination of a tenancy when requested by the tenant.
- Utilities, communication services and Council Tax.
- Payments arising from a default by the tenant where they have had to replace keys or a respective security device, or a charge for late rent payment (not exceeding 3% above the bank of England base rate).
A breach of the fees ban will be a civil offence with a financial penalty of up to £5,000.
Since 1 April 2019, agents must hold any client money in a separate client money account. Client funds must be protected through membership of a client money protection scheme.
Boroughs are cracking down on rogue letting agents to protect tenants from unfair treatment.
As the research shows, this poses a serious challenge in London, where housing pressures are so severe and a significant number of letting agents have been breaking the rules. Borough trading standards teams are crucial for tackling this issue.
Through raising awareness, issuing fines and pursuing prosecutions, we’re determined to support tenants and make clear to rogue letting agents that bad practice is unacceptable.
Helping ARLA Propertymark members to comply
ARLA Propertymark members can access a range of resources including fact sheets which help to break down your obligations under legislation, including:
Fact sheets: Tenant Fees Act
The Tenant Fees Act came into force on 1 June 2019, to help our members comply with this complex piece of legislation we created a series of facts sheets covering various aspects of the ban.
Fact sheet: Consumer Rights Act 2015: Duty of letting agents to publicise fees
Part three, Chapter three of the Consumer Rights Act 2015 says that letting agents must publicise fees and display whether they are a member of a Client Money Protection scheme and which redress scheme they have joined.
Fact sheet: Client Money Protection for letting and managing agents
The Housing and Planning Act 2016 enables the Secretary of State to require that letting and property agents in England belong to a government-approved Client Money Protection scheme.
