A council that has been on the warpath against letting agents has so far taken two to court, with another five awaiting prosecution, and a further 32 under investigation.
One of the agents successfully taken to court pleaded guilty to two offences under the Consumer Protection from Unfair Trading Regulations after not displaying his fees.
Newham Council, in London, also reports that it has recovered “thousands of pounds” in tenancy deposits illegally retained by agents, and issued over 100 legal notices.
Newham was the first local authority in the country to introduce blanket licensing of all private rented properties – a move that has since been widely copied.
It is thought that its Fair Lettings Project clampdown on agents could also provide a template in other parts of the UK.
As part of its clampdown, Newham has issued ten penalty charge notices to letting agents that were also estate agents but did not belong to an ombudsman scheme.
In what reads like a damning indictment of parts of the letting industry and, in particular, successive governments’ failure to regulate to stop rogue agents ever setting up in the first place, Newham reports having visited a total of 197 letting agents. From these visits, 113 notices for corrective actions have been issued. Four agents stopped trading after being visited.
The agent prosecuted over CPR offences was Zulfikar Shakur from Homes 4u Direct. He pleaded guilty at Thames Magistrates Court to two offences. These were not having transparent fees and charges, and not displaying the maximum occupancy level as required as part of the licensing scheme.
He was given a 12-month conditional discharge and ordered to pay £500 court costs plus a £15 victim surcharge.
The clampdown was introduced by the Labour-run authority to ensure that letting agents in the borough comply with legislation. The council says that most now are complying.
Sir Robin Wales, mayor of Newham, said: “Forty per cent 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.”
Newham said it is working with national professional bodies including ARLA and NALS. All letting agents in the borough are expected to belong to a reputable trade body or professional association.
In addition, all agents in Newham are expected to provide full information on fees to both landlords and tenants; provide tenants with a copy of the property licence; ensure all deposits are protected; and provide accurate information to landlords and tenants.
Newham has the largest private rented sector in London, with around 40,000 properties.
The council says it is the “first local authority in the country to stand up for private tenants and landlords who are being exploited by rip-off letting agents flouting the law”.