Property News

Calls for £30,000 fine for larger agents who flaunt proposed fees ban

Em Morley - June 6, 2017

The more larger letting agents found to be in breach of the proposed ban on letting agent fees should receive fines of up to £30,000 to ensure compliance.

That is the view of the Chartered Institute of Environmental Health, which has revealed what was in its submission under the Government’s consultation process around the ban.

Ban on Fees

The proposed ban on fees was outlined in last year’s Autumn Statement. The CIEH has given its backing to the ban on all letting agent fees, arguing that this would get rid of some barriers facing tenants in moving out of a sub-standard home.

Representing the workforce of environmental health professionals that undertake inspections in the private rental sector, the CIEH has recommended fines of up to £30,000 for big property managing agents.

In addition, the membership body has recommended that holding deposits should not be exempt from any ban, as this could cause issues with loopholes to exploit tenants. An example of this could be agents holding onto more than a single tenant’s deposit for the same property.

It notes that holding deposits pose an extra barrier to tenants wishing to move home, as they heighten the amount of money required to secure a new tenancy. Should these be allowed, the CIEH wants to see them registered under a mandatory client money protection compensation scheme in order to avoid any abuse.

Tenant Rights

Also in its submission, the CIEH suggests that tenants should be given accessible information surrounding their rights and obligations on letting agents. These should include information on how to lodge a complaint with the correct enforcement body.

CIEH believe that the ban on agent fees should apply to landlords and third parties, in order to avoid any additional charges to the tenant through a different route. It suggests that premium sections of the market should not be exempt.

The only reason for exclusions to the ban, the organisation suggests, should be due to malicious tenant actions.

Calls for £30,000 fine for larger agents who flaunt proposed fees ban

Calls for £30,000 fine for larger agents who flaunt proposed fees ban

Standards

Tamara Sandoul, CIEH policy manager, feels that the underlying point behind the suggestions is to help improve standards and conditions in the sector, while protecting tenants at the same time.

Sandoul said: ‘The private rented sector is such an important part of the housing market, providing homes for people who otherwise cannot afford to buy their own, especially the vulnerable and those on low incomes.’[1]

‘While the vast majority of letting agents are responsible, there are those who exploit tenants by charging them extortionately high fees. A comprehensive ban on letting agents’ fees is a very positive step forward. It will give tenants greater freedom to move out of properties that are hazardous and in poor condition, which in-turn should drive up standards and quality of rented housing,’ she continued.[1]

Concluding, she noted: ‘We do not expect to see higher rents because of the ban as the cost of referencing new tenants is likely to be small in comparison to the costs of maintaining a property to a good standard. At the moment managing agents are charging both the landlord and the tenant fees, but this ban should help to increase competition between letting agents and help to drive the total costs down.’[1]

[1] http://www.propertywire.com/news/uk/call-fines-30000-flout-upcoming-lettings-fee-ban-england/