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.
Has anyone had a visit from Trading Standards to check whether they are complying with the Gas Safety Regulations, supplying Energy Performance Certificates etc, etc.
I think not!
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Oddly, I have. But because I reported the ex-landlord of a new tenant of mine who had no GSC and no EPC as well as not protecting deposit etc. They came to ME and started asking for MY compliance paperwork, even though this was the third time I had reported as many agents/landlords for blatant breaches of the rules. The first two times they were totally vacant when I asked if they knew about enforcement at it fell to them as Trading Standards -they didn’t have a clue what I was talking about!
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We have. I was amazed. She sat down and pointed out properties and asked us for the EPC links of about 20 properties. What a waste of our time and hers.
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No enforcement – so that’s OK then. We won’t bother!
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The law is treated with contempt and there is no enforcement? Typical.
‘Police and enforce’ and you will fix many of the problems in our industry very quickly.
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We have complied but I have to say many haven’t. One of the things I think agents struggle with, as we did, is publishing the let only, RC and Management fees charged to Landlords. Like many firms we take a commercial view on this and will bend a little where appropriate, so to publish them puts at a distinct disadvantage as we lose the ability to justify our fees. My accountants don’t publish theirs, my solicitor doesn’t publish his, so I am not sure why we are required to. Publishing these in the first place serve no benefit in transparency to Landlords or Tenants and so I really feel this whole legislation was an example of using a sledgehammer to crack a nut.
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Agree with you RealAgent. In my own case, I feel at a distinct disadvantage now as a large number of my competitors are not displaying their fees to landlords at all. So what am I to do? Break the law and remove the disadvantage, or suffer the disadvantage?
Government should check they have the resources to police and enforce BEFORE they pass laws. Otherwise, it’s like threatening your child with a punishment and not following through: they soon learn to ignore you.
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I have suggested to Brandon Lewis and tweeted that the Trading Standards staff should have the right to collect the fines for their own departments to fund enforcement of these offenders. It would not take many fines to fund a staff member and would have a field day in the town where I work.
Giving this devolved power to local government would mean that they would be accountable to their local communities and also could be leaned on by good agents and landlords to raise the standards to where the law says they should be. It is all very well having all these laws and threats but when they are empty they are pointless
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There is a lot of justifiable disbelief expressed in the posts above. I’d like to shoot off on a slight tangent and express some disbelief of my own:
I simply cannot believe for one second that ‘singlelayer’ – undisputed frontrunner for “Malcontent of the Year (insert any year…)” with his disrespectful and downright churlish comments vented towards pretty much anyone over the age of 31 who isn’t his Nan is apparently employed in the industry renting and/or selling property.
Beggars belief that he has the two-faced audacity to serve those he clearly despises so intensely…
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Jealousy is a powerful motivator Peebee
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It seems you two have a little ‘thing’ going on. My opinions on a different topic have nothing to do with what I say here. For your information I have over 150 properties and manage another 350 or so. I made specific comments on a specific issues aimed at what I believe to be problems with that particular area of the industry -they’re purely my opinion regardless of whether you like it or not. Who is it I am serving with such audacity that I despise so intensely?
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Nobody likes a snitch but if Trading Standards are struggling under the “heavy load” then why not let the Agents who clearly have some spare time on their hands if like me there “cupboards are bare” help point them in the right direction, and help generate £5k a pop for them and a warm sense of do-goodin for us hard working fully compliant offices who at least deserve a level playing field.
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