A letter seen by Eye suggests that cash-strapped Trading Standards will not be rushing to enforce a new law that, on paper, requires strict compliance by letting agents or they face a £5,000 fine.
It is exactly a fortnight since, under the Consumer Rights Act, all letting agents in England are required to display details of all fees and charges on their websites and prominently in their offices. The law states that these must be shown inclusive of VAT.
From May 27, agents are also required to display whether they are a member of a Client Money Protection scheme, and to state which redress scheme they belong to.
However, while the industry’s compliance appears very low, it seems that the rate of active policing could be lower still.
The letter which Eye has seen was sent last Friday by the Trading Standards Institute in response to a complaint from one agent who is compliant about one that is not.
The letter states: “As you may know the rules provide for the issuing of a fixed penalty notice for failure to comply with the rules provided intention to issue a notice has been issued.
“However please be aware that councils have received no extra resources to carry out these extra duties. In addition, as with any new regulatory legislation that is not safety related, the general expectation by government and business affected is for a ‘lighter touch’ on enforcement to be adopted in the early days.
“Nevertheless I share and appreciate your frustrations regarding a level playing field and I can assure you that the new rules are something we are actively engaged with.”
The new law means that all fees payable to an agent either by a landlord or tenant must be shown, including charges paid during the course of a tenancy.
The law says that the “list of fees must be comprehensive and clearly defines; there is no scope for surcharges of hidden fees. Ill-defined terms such as administration costs must not be used. All costs must include tax.”
The law also says that the penalty fine of £5,000 should be regarded as the minimum, with enforcement authorities able to impose unlimited further penalties if a letting agent continues to be in breach of the legislation.
Despite the very clear wording of the law, Eye has been sent lists of both national and local agents who are flouting it, either in whole or in part.
The lists includes some well known names, including agents belonging to national chains, on whose sites Eye has not been able to find anything about fees at all.
That does not necessarily mean the information is not there – only that we cannot see it. For example, one agent does show landlord fees, but we are told only behind the landlord log-in.
Some agents show on their websites tenancy fees but not landlord fees, and a number are silent on both redress schemes and Client Money Protection. Others show their fees as + VAT when the clear legal requirement is to show fees as inclusive of VAT.
Michael Day, of industry consultancy firm Integra, said: “I think it would be harder to find examples of compliance than non-compliance.
“I have no statistics, but I doubt if 5% of the industry has yet fully complied.”
At this stage, we have decided against naming the agents on our lists – partly because we know the lists are not comprehensive and do not cover the whole of England, and it would therefore be unfair to pick out some agents and not others.
However, over the next few weeks Eye will be approaching some of the better-known firms on our lists to seek clarification.