Letting agents that fail to comply with the law on protecting tenants’ and landlords’ money, or other legal requirements, are being issued with fines of up to £30,000 by council trading standards officers in a London-wide enforcement operation aiming to crack down on rogue elements within the renting sector.
Since April 2019 letting agents have been required by law to belong to an approved Client Money Protection (CMP) scheme to ensure that tenant and/or landlord money is protected should the business fail. London is home to thousands of letting agents handling client money every day, so any significant level of non-compliance with the law could leave significant sums of tenant and/or landlord money at risk. Letting agents are also required to belong to an approved Redress scheme and to publish their CMP certificate and other important information on their websites and in their offices.
Hundreds of London letting agents have already been identified where there is evidence of a breach of the law. Almost 100 of these have already been served with a formal ‘Notice of Intent’ by their local council, warning of an intention to impose a financial penalty and many more will receive similar notices over the coming weeks. These agents have 28 days to provide any evidence or mitigation in their defence before councils will make a final decision on issuing a financial penalty, which can be up to £30,000 for failure to belong to a Client Money Protection scheme, or up to £5,000 for other breaches of the law.
The enforcement operation is being run by London Trading Standards (the partnership body of the 33 London local authority trading standards services) and the National Trading Standards Estate and Letting Agency Team, with funding from the Ministry of Housing, Communities and Local Government (MHCLG).
Nishi Patel, Chair of London Trading Standards, said: “London letting agents are handling billions of pounds of tenants’ and landlords’ money every year, so it’s vital that this money is protected in the event of business failure. London borough trading standards teams have been increasingly active in tackling rogue lettings agents in recent years, and this London-wide operation has enabled us to step-up our efforts to a new level. I warn any London agents out there who think they can get away with failing to comply with the law that they need to think again and get their affairs in order without delay.”
The London-wide crackdown is being supported by the National Trading Standards Estate and Letting Agency Team, which provides specialist advice, guidance and support to local authorities across the United Kingdom.
James Munro, head of the National Trading Standards Estate and Letting Agency Team, said: “Our officers are providing advice and guidance to support this landmark enforcement initiative, helping to safeguard billions of pounds of consumers’ money. The intelligence gathered from this campaign will be used to support local authority investigations across the country, which will help protect consumers, raise compliance across the industry and boost consumer confidence.”
“Agents who hold client money are required by law to be registered with an approved CMP scheme – and to inform tenants who they are registered with. To find out more, please visit https://www.gov.uk/client-money-protection-scheme-property-agents.”
London’s Deputy Mayor for Housing and Residential Development, Tom Copley said: “With nearly three million Londoners renting their home, it is vital that both tenants and landlords have absolute faith in the letting agents who are handling their money.
“Trading standards officers are London’s first line of defence against unlawful letting agent activity, which puts both renters and landlords at risk. The Mayor and I will continue to support their vital work and lobby the Government to ensure they have the powers and resources they need to tackle rogue agents.”
Cllr Darren Rodwell, London Councils’ Executive Member for Housing & Planning, said: “We won’t put up with rogue letting agents making life miserable for their tenant and landlord clients. Boroughs’ trading standards teams are cracking down on rogue agents across the capital and enforcing the rules for keeping tenants’ and landlords’ money safe. This pan-London project and the hefty fines being issued should make clear to rogue letting agents that bad practice is unacceptable.”
If you are aware of any letting agent that is failing to comply with the law, then you can report this to your local trading standards service via the Citizens Advice Consumer helpline on 0808 223 1133. Alternatively, you can report cases via the London Trading Standards online consumer crime reporting tool http://www.londontradingstandards.org.uk/report-consumer-crime/ .
