Housing is one of the main issues for London residents and over recent years there have been increasing concerns over unfair practices in the private rental sector.
London Trading Standards have risen to the challenge and are working together to tackle rogue landlords and letting agents who don’t comply with the law.
In 2018 London Trading Standards held its first ever lettings focused seminar entitled Agenda for Change – London Lettings Sector, in collaboration with various key partners. Read our news item about the event here.
We enforce a range of legislation intended to ensure fairness and transparency in the lettings and property market. There has been a number of high profile prosecutions and actions reported in the media which demonstrate our leading role in this sector. You can read about these outcomes here.
Since October 2014 all letting and property management agents have been required to be a member of a Government approved redress scheme. This is similar to the schemes already in place for estate agents. The scheme enables an approved third party to arbitrate disputes between agents and tenants.
Your local council (usually theTrading Standards service) can issue a penalty notice of up to £5,000 to any agent who is not a member or who fails to clearly display a notice stating which scheme they have joined at their premises and on their website.
Since May 2015 all letting agents and property management companies must display their fees and charges to landlord clients at their premises and on websites.
This includes all compulsory and upfront charges. The fee list must include a description of each fee, whether it is per tenant or relates to each dwelling, and the amount inclusive of VAT
Your local Trading Standards can issue a penalty notice of up to £5,000 to any agents that fail to display and describe fees, or their method of calculation correctly.
In 2018 a survey carried out as part of LTS week showed that over 30% of agents were not displaying fees correctly.
From 1st June 2019 fees imposed on tenants by landlords or agents are banned with the exception of some permitted payments.
A breach of the legislation will usually be a civil breach with a financial penalty of up to £5,000. However, if a further breach is committed within five years of the imposition of a financial penalty or conviction for a previous breach, this will be a criminal offence. Upon conviction, the penalty is an unlimited fine and a banning order offence under the Housing and Planning Act 2016.
Where an offence is committed, enforcement authorities may impose a financial penalty of
up to £30,000 as an alternative to prosecution. In such a case, enforcement authorities will
have discretion over whether to prosecute or impose a financial penalty. Where a financial
penalty is imposed this does not amount to a criminal conviction.
A breach of the requirement to repay the holding deposit is a civil offence and will be
subject to a financial penalty of up to £5,000.
Detailed guidance is available on the GOV.UK website.
Letting agents and property management agents in England must join a ‘client money protection scheme’ if they hold clients’ money. This includes where an agent passes rent payments received from a tenant on to a landlord.
If an agent fails to comply with the legal requirement to become a member of an approved CMP scheme they will be liable for a penalty of up to £30,000.
An agent will also be liable for a penalty of up to £5,000 for failing to comply with the legal requirement to display their certificate of membership from an approved CMP scheme. This is separate from existing requirements to protect tenancy deposits.
It is important for to tenants and landlords to know this as it protects their money in the event of a business failing.
Trading Standards enforce the provisions of the Consumer Protection from Unfair Trading Regulations 2008. These prohibit ‘unfair commercial practices’ which include a wide range of activities detrimental to the interests of consumers.
It is important to remember that tenants are “consumers” and buy services from landlords, usually via agents and that this legislation applies to the lettings sector.
Unfairness may arise from;
- misleading actions – giving false or misleading information to consumers
- misleading omissions – hiding or failing to provide material information to consumers
- aggressive practices – exerting undue pressure on consumers
- failing to show professional diligence – not acting with the standard of care and skill that is in accordance with honest market practice and in good faith
- engaging in one or more ‘banned practices’
Examples of banned practices include displaying a trust mark (such as a logo) without authorisation and false claims about membership of a professional body or an approved redress scheme.
Your local Trading Standards can investigate complaints and, where appropriate and proportionate, prosecute agents and landlords for breaches of the regulations. On conviction fines or even a term of imprisonment can be imposed by the Courts.
Tenants may also be able to pursue their own redress remedy or seek damages where a landlord or agent has a committed a misleading or aggressive practice under the 2008 Regulations.
The Consumer Rights Act 2015 contains provisions which means that unfair contract terms are not binding on consumers, which can include tenants. A term may be deemed unfair if it is contrary to the requirement of good faith, or it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer.
Your local trading standards can consider complaints about certain terms and take legal action to prevent their use.
Most properties being sold or rented require an EPC which gives information on the energy performance of a building in a sliding scale from A (very efficient) to G (least efficient). This enables potential buyers and tenants to consider a building’s energy efficiency and typical energy costs. The EPC can also contain suggestions of how to reduce the energy usage of that building.
Your local Trading standards service is responsible for the law regarding EPCs. If a landlord breaches any duty listed in the relevant regulations a penalty charge notice of £200 may be issued.
Minimum Energy Efficiency Standard (MEES)
Landlords of privately rented domestic and non-domestic property in England or Wales must ensure that their properties reach at least an Energy Performance Certificate (EPC) rating of E before granting a new tenancy to new or existing tenants.
These requirements will apply to all private rented properties in England and Wales, even where there has been no change in tenancy arrangements:
- from 1 April 2020 for domestic properties
- from 1 April 2023 for non-domestic properties
There are a number of exemptions and further guidance can be found on the GOV.UK website.
Penalties of up to £5,000 may be imposed for breaching the minimum energy efficiency standard rules.
To report an issue with a letting agent contact us via the Citizens Advice Consumer helpline.