Council clamps down on rip-off letting agents
Published by Max Salsbury for 24dash.com in Local Government and also in Housing, Legal, Regulation
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A London council says it has become the country's first local authority to stand up to rip-off letting agents operating in breach of the law.
Newham Council claims its initiative to tackle poor practice by lettings agents and protect tenants has helped to improve standards in the profession, with the majority of agents now complying with the law.
The Fair Lettings Project was introduced to ensure letting agents in the borough were complying with legislation to stop tenants from being exploited.
With complaints regarding letting agents having increased significantly in recent years, both locally and nationally, the Competition and Markets Authority has highlighted unfair and illegal charging practices affecting both private tenants and landlords.
Since November 2013, Newham's officers have visited 197 known letting agents in the borough to check their conditions.
From these visits, 113 notices for corrective actions have been issued. Most are now either fully or broadly compliant with current consumer protection and housing legislation.
The council has also been able to recover thousands of pounds of tenants’ deposit money, illegally retained by letting agents.
Four agents stopped trading after the first visit, two letting agents have been prosecuted and another five will face legal action.
One letting agent, Zulfikar Shakur from Homes 4u Direct, pleaded guilty at Thames Magistrates' Court to two offences under the Consumer Protection from Unfair Trading Regulations 2008.
The offences included not having transparent fees and charges and not displaying the maximum occupancy level required as part of the private sector licensing scheme.
There are a further 32 letting agents under investigation. Ten penalty charge notices of £1,000 have also been issued to letting agents who are additionally acting as estate agents but do not belong to an approved redress scheme.
All letting agents in Newham are now expected to:
• Provide full information and clarity on all fees and charges to all parties
• Provide tenants with a copy of any property licence and information on the licensing conditions
• Ensure all third party deposits are registered in an approved tenancy deposit scheme
• Correctly returning all holding deposits without illegal deductions
• Always providing accurate information to landlords and tenants
• Membership of reputable trade bodies and professional associations
Sir Robin Wales, Mayor of Newham, said: “The Fair Lettings Project has been a great success with the majority of letting agents now operating within the law. We have already seen the prosecution of one letting agent who continued to work illegally which is to the detriment of both tenants and landlords.
“Forty percent of all Newham households rent privately and many depend on a largely unregulated industry. It is encouraging that so many of the letting agents are now complying with the law and we will support those who need help and assistance. The project complements our private sector licensing scheme which has already raised standards across the private sector. We will continue to work hard to ensure Newham residents who rent privately are not exploited and get a decent roof over their head.”
Alex Hilton, director of Generation Rent, a group that campaigns for tenants' rights in the private rented sector, said: “Anyone can set themselves up as a letting agent and cream cash from a captive market of renters. As home to one of the highest populations of private renters in the country, Newham Council has been at the forefront of efforts to stamp out bad practice.
"While cowboy agents get chased out of the borough it creates a better more trusting relationship between tenants and the majority of decent agents who remain. We’re just worried about whether those cowboys are setting up shop elsewhere and exploiting renters outside Newham.”