Financial penalties imposed on 27 letting agents in Tower Hamlets
Officers from Tower Hamlets Council have been busy conducting checks on local letting agents and investigating cases reported by members of the public.
Under the Consumer Rights Act 2015, all agents are required to display a full list of landlord and tenant fees both instore and on the agent’s website. The agent must also state which government-approved redress scheme they comply with and whether they belong to a client money protection scheme.
As a result of these investigations, Tower Hamlets Council have issued financial penalties to 27 letting and managing agents for failing to display essential information. According to the council, penalties totalling £150,000 have been imposed, with penalties ranging from £1,000 to £10,000.
Those who have been issued penalties are also being required to immediately make adjustments to comply with the legislation. The council have said they will carry out further checks shortly to ensure this has been done.
John Biggs, Mayor of Tower Hamlets, said:
“We are committed to ensuring people wanting to live in our borough are not exploited by rogue letting agents or landlords. We will not tolerate individuals or organisations actively trying to mislead our residents.
“The majority of letting and managing agents in Tower Hamlets successfully help people to settle within our diverse and growing borough. It’s disappointing that a small number are acting dishonestly and misleading people looking for a new home.“
High levels of non-compliance found across London
Meanwhile, a survey carried out by London Trading Standards (LTS) last month revealed that many letting agents in London are not being transparent about their fees and how they will protect tenants’ money.
Trading Standards Officers examined 137 letting agents across London to find out whether agents were following the law and whether and they were providing the correct information to prospective tenants.
It has been a legal requirement for letting agents to display a list of fees and have a Client Money Protection statement since May 2015. Three years after the legislation was put in place, LTS found:
- 53% were not displaying a Client Money Protection (CMP) statement
- 37% were not displaying landlord fees
- 31% were not displaying tenant fees
- 22% were not displaying evidence of membership a redress scheme
Private sector renting is at an all-time high in the capital, with around a quarter of households now privately renting – compared to a fifth in the rest of England. Rents are also highest in London and so it is crucial that tenants and landlords know what fees they are going to be charged.
Client money protection (CMP) schemes are vital as they protects clients’ money if a letting agent goes out of business or disappears. Currently letting agents do not have to be a member of a client money protection scheme but just have to state whether they are or not. However, next year membership of a CMP scheme will be a compulsory requirement. In the meantime LTS advises tenants and landlords to a use an agent that has client money protection.
Martin Harland, Chair of the London Trading Standards (LTS) Letting Agents Group and Principle Officer at Camden Council said:
“We are disappointed at the results of our research and we won’t allow letting agents flouting the law to get away with it. It’s simply not fair to the consumer or to a substantial part of the letting industry who go out of their way to do things right.“
“London Trading Standards wants to protect London residents and the businesses that trade fairly here. If you know an agent who isn’t publicising their fees or who isn’t complying with the law, let us know about it.“.
LTS will be following up the results of this survey with the relevant businesses to ensure compliance, and tenants and landlords are advised to contact their local authority it they are aware of any agents not displaying fees.
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