Letting agents warned – display your fees or risk a £5,000 fine

Wednesday, October 26th, 2016 - York City Council & TPO

In a sign that councils are stepping up action against agents that fail to display their fees, York City Council has revealed that 15 letting agents have been served with a notice of intent which could lead to a £5,000 penalty.

To date, York City Council have served two final penalty notices, one at the maximum level and other at a reduced level following representations received. More final penalty notices are expected to follow soon.

According to the council, nearly a third of letting and property agents are still failing to comply with legislation introduced in 2015 that requires them to display all their landlord and tenant fees both in-store and on the company website.

In June 2016, the National Approved Letting Scheme published a ‘Effective Enforcement in the PRS’ Toolkit which helps councils to understand and enforce the rules, in the interests of consumer protection (read here). London Property Licensing assisted in drafting the guidance.

Last year, York City Council officers wrote to 77 local letting agents reminding them about the new laws and seeking written confirmation they had taken all necessary steps to comply. All agents either responded in writing to confirm compliance or received a visit to discuss the requirements.

However, a further random survey of six agents carried out in June 2016 found a third of York letting agents were failing to comply – one had not displayed their tenant fees and the other was displaying no fees at all. As a result, the inspection programme was extended to 47 letting agents of which 15 were found to be non-compliant. All these agents have now been served with a Notice of Intent.

Under the enforcement procedure, agents served with such a notice can submit a representation to the council within 28 days. The next step is service of a final penalty notice which normally incurs the maximum penalty of £5,000.

Of the 15 agents found to be non- compliant, York City Council found:

  • Seven were failing to display their fees in the office;
  • Four were failing to display their fees on their website; and
  • Five were failing to display fees either in their office or on their website.

Councillor David Carr, Executive Member for Housing and Safer Neighbourhoods, York City Council, said:

Letting and property agents play a significant part in York’s private rented sector. It is important that it provides and fair and transparent service to all its tenants and landlords and we will continue to advise and regulate agents as the new legislation allows.

TPO and CTSI launch letting fees campaign

Meanwhile, the Property Ombudsman Scheme (TPO) has launched a new national campaign with the Chartered Trading Standards Institute (CTSI) to tackle lettings agents that are breaking the law by not displaying their fees.

The joint campaign will initially target agents operating in Swansea and Dorset, who will be required to provide TPO with photographic evidence to demonstrate they are complying with the law by displaying their fees in both the branch and on their company website.

In this innovative new approach, any agent that fails to submit evidence will be referred to Trading Standards for further investigation.

Gerry Fitzjohn, TPO’s Board Chairman, said:

We want our agents to lead from the front. There can be no excuses. We’re zero tolerant on this issue. Letting fees are under the spotlight and firms would be well advised to get their house in order to ensure they comply with the law. Our joint aim with this campaign is to improve compliance within the industry and raise awareness among consumers so more landlords and tenants ask about fees before they choose their letting agent.

Adrian Simpson, the CTSI’s business education and consumer codes expert, said:

Agents signed up with The Property Ombudsman scheme have shown that they are willing to commit to the highest levels of consumer protection by following the scheme’s CTSI-approved Code of Practice. We fully support TPO’s efforts to improve industry compliance and any agent that has failed to display their fees up until now must act. We are aware of Trading Standards Officers taking serious action against those that fail to comply.

The campaign will publicise the growing number of cases where Trading Standards Officers have successfully imposed the maximum penalty of £5,000 on lettings agents for failing to display their fees.

Katrine Sporle, Property Ombudsman, said:

As Ombudsman, my primary focus is that agents should be clear and transparent in their dealings with consumers. Agents that display their letting fees demonstrate to consumers that they are operating to a high standard, complying with the law and TPO’s Code, and are open in their communication. As highlighted in TPO’s Annual Report, poor communication is one of the key root causes of consumer complaints. Displaying fees can only help reduce complaints and raise standards.