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”.
The report mentions the council is going after ''letting agents'' the correct term should be ''lettings professionals'' – CMA (Competition & Markets Authority) guidance (formally OFT) is geared not just at ''Letting Agents'' but those who commercially trade in offering rentals. So a key point is that even larger private landlords letting their own units could get done. A good bit for proper agents to add into their pitch to private landlords who don't want the legislation headaches.
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According to Newham Council, this project specifically targeted letting agents. It says: "The Fair Lettings Project was introduced by Newham Council to ensure letting agents in the borough comply with legislation to stop tenants from being exploited. The project also aims raise standards in the industry to benefit landlords."
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Having been to this part of London recently there are an awful lot of individual shops running a multitude of businesses from one premises that somehow include 'letting agency' amongst their offerings. These add-on businesses are clearly not to be taken seriously and Im glad the council are robust in their dealings. As usual legitimate agents get a bad name from some of these part time cowboys.
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Lets be honest, the letting industry has been a big hole for making money by some very shaddy characters for many years, who just don't give a **** about being professional and wouldn't last 5 minutes as a true estate agency. Tell me a city or town where we all don't know of someone we wouldn't put out if they were on fire and make your blood boil with the antics they get away with while you are diligent in your professionalism. The industry has been warned so many times of whats coming if they don't get their act together. Agents with professional standards of due diligence etc have nothing to fear.
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Actually, agents with professional standards of due diligence etc. have plenty to fear: increased red tape/regulation/legislation/running costs. All of these we must bear to prove that we are honest and professional in the first place. It is not just landlords and tenants who suffer because of the rogues!
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I agree but that is the system we all live in, the few bad eggs spoil it for the good ones. Regulation is coming, it is on the Labour agenda with a vengence no matter what the chaos with red tape it will cause and at our expense in more than one way!
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