Trading Standards issue over £1 million in fines to letting agents in London

London Trading Standards (LTS) has issued a stark warning to tenants to make sure they understand their rights or risk being ripped off by rogue letting agents after issuing over a million pounds in fines.

LTS released figures showing that letting agents were fined over £1.2million for breaking the law, either for not displaying fees and charges or for not being members of a redress scheme.

The data reveals that more than 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 redress scheme membership.

As well as the fines, London boroughs instigated 14 criminal prosecutions for a range of offences including breaches of unfair trading rules. The enforcement survey by London Trading Standards shows that there were over 6,000 letting agents operating across the capital and over 1,000 complaints about them.

‘London borough trading standards teams have been increasingly active in tackling rogue letting agents in recent years, with over £1.2 million 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,’ said LTS operations director Stephen Knight.

He pointed out that anyone needing help with a dodgy letting agent should contact the Citizens Advice consumer helpline on 03454 04 05 06 and they can refer them to their local council trading standards team.

He also pointed out that two new laws, the Tenant Fees Act and the Client Money Protection Schemes for Property Agents, which have recently come into force are likely to add significant new protections to tenants.

Until now, trading standards teams had limited powers to tackle rogue letting agents. Under the Tenant Fees Act, which applies to tenancies signed since 01 June 2019, agents are banned from charging fees for all but a handful of controlled subjects and deposits are strictly limited. Also, since 01 April 2019, agents must hold any client money in a separate client money account. This 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,’ said London Councils’ executive member for housing and planning and leader of Barking and Dagenham Council, Darren Rodwell.

‘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,’ he added.

According to Dan Wilson Craw, director of Generation Rent, a campaign organisation on behalf of private renters, the Tenant Fees Act has the potential to save tenants hundreds of pounds every time they move.

‘But because so many letting agents have been flouting existing laws, you have to be vigilant when looking for a new home to avoid being ripped off. If a letting agent asks for something unusual, like a payment for something that is not rent or a refundable deposit, then you should question this and seek advice if unsure. For example, London Renters Union could help you if you’ve been asked to pay an illegal fee,’ he explained.

Leon Livermore, chief executive at the Chartered Trading Standards Institute, Leon Livermore, described the fact that London boroughs had to issue over £1.2million in fines and started 14 criminal prosecutions as ‘truly shocking’.

‘This kind of enforcement work by trading standards illustrates how big a part the profession is playing in keeping UK consumers safe and holding rogue letting agents to account,’ he said.

David Cox, chief executive of the Association of Residential Letting Agents (ARLA) welcomed the prosecution of 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,’ he said.

‘This raises the question what other laws will that agent break? At that stage, a tenant should walk straight out and choose an ARLA 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,’ he added.