A London Property Tribunal has ruled against a letting agent for illegally deducting money from a tenant’s deposit, highlighting ongoing compliance issues with the Tenant Fees Act 2019 seven years after its introduction.
The case involved International Property Investment Ltd, which deducted £125 from a £650 deposit without providing justification or following the required dispute resolution process through an ombudsman service. The firm, which lists its address as a flat in Tower Hamlets, is currently facing potential strike-off from Companies House for late submission of its confirmation statement.
Regulatory requirements
Under the Tenant Fees Act 2019, agents and landlords cannot automatically charge tenants for cleaning costs or deduct such fees from deposits without first going through an official dispute process with one of the ombudsman services. The legislation also prohibits vague ‘check out’ fees as a means of circumventing these rules.
According to the tribunal decision, the tenant challenged the deduction after receiving no explanation for the £125 charge, which the firm described as ‘automatic and mandatory’. When International Property Investment Ltd failed to respond to tribunal requests, the case proceeded in the tenant’s favour, and the £125 must now be returned.
Industry compliance trends
Cleaning disagreements account for more than 50% of all formal deposit dispute cases handled by the two ombudsman services in Britain, making them the most common cause of end-of-tenancy disputes. However, tribunal cases related to Tenant Fees Act violations have declined from 20 cases last year to four cases so far this year.
Despite this reduction in formal tribunal cases, the actual number of agents and landlords deducting disputed cleaning costs without following proper procedures may be considerably higher. Industry observers suggest that some agents, particularly those serving lower-income tenants, continue to exploit tenant unfamiliarity with their rights to generate additional revenue from tenancies.
Regulatory implications
The case adds to calls for stronger enforcement of existing regulations in the lettings sector. With Prime Minister Andy Burnham and Housing Secretary Angela Rayner in office, industry regulation remains under scrutiny, particularly as broader policy changes affecting landlords and agents continue to be debated.
While the majority of letting agents have integrated Tenant Fees Act requirements into their operational procedures and staff training, compliance gaps persist among a segment of the market. The tribunal decision serves as a reminder that enforcement mechanisms remain active, though questions remain about the scale of unreported violations across the sector.
