An agent who says a number of letting businesses have broken the law by not signing up to a redress scheme has been told that no local authority in his region has issued a fixed penalty notice.
By virtue of some quick googling, the agent says he found five local agents in the north-east which apparently do not belong to a redress scheme. He says he also found two national firms not listed as members of any of the three redress schemes.
The agent, Ajay Jagota of KIS, originally sought figures from the Ministry of Justice after Citizens Advice estimated in March that 20% of letting agents had not signed up, despite it being made a mandatory requirement last October.
The Ministry of Justice told KIS that the information was held by the Department of Communities and Local Government.
The Department said it did not hold the information and referred KIS to local authorities. Jagota then made Freedom of Information requests.
One north east authority initially claimed that it was not their responsibility to collect the information, says KIS.
KIS asked the five Tyne and Wear councils the following question: “How many fixed penalty notices have been issued since 1 October 2014 to letting agents who are not members of an approved redress scheme under the provisions of SI. 2014 No.2359 Redress Schemes for Letting Agency Work and Property Management Work (Requirement to Belong to a Scheme etc.) (England) Order 2014”.
Gateshead, Newcastle, North Shields, South Shields and Sunderland all replied saying they had not issued any notices.
Local councils can issue fines of up to £5,000 to agencies which have not signed up.
KIS founder Ajay Jagota said: “It would be nice to think that the absence of any fines for letting agents not joining a mandatory redress scheme means every single agent has signed up to one – but with Citizen’s Advice estimating that one in five agents haven’t, that seems to be a little fanciful.
“My concern with the law has always been that it isn’t clear who exactly is enforcing it. What’s alarming about our research is that at least one of the enforcers didn’t seem to know either.
“We found agents who don’t seem to be members of any of the schemes within five minutes of googling. The authorities don’t even seem to be doing that.”
Earlier this week, Eye reported having seen a letter which suggested that cash-strapped Trading Standards would not be rushing to enforce the law requiring letting agents to display their fees to both tenants and to landlords, with the name of the redress scheme they belong to, and whether or not they offer Client Money Protection insurance.
Yesterday, one agent tweeted: “Spent today on competitors’ websites checking lettings fees. Well I would have, had any had them on display. Now shopping to trading standards.”
Eye reported it here
Comments (12)
With many local councils expressing their desire to better regulate the private rented sector through the imposition of property licensing schemes, it is concerning to see so little enforcement against agents that ignore redress scheme membership. In my opinion, better enforcement of this requirement could have a significant impact in driving out rogue agents, thereby helping to raise standards across the industry.
The enforcement power sits with local councils and can be enforced by either housing or trading standards teams. It is a civil penalty and so the process is simple. Issue a warning. If the warning is ignored, the council can issue the agent with a civil penalty of up to £5,000 with no need to compile a complex prosecution file. The legislation allows the council to keep the money raised, which in turn can be reinvested to fund further enforcement activity.
With this in mind, hopefully more councils will step up to the mark and start enforcing redress scheme membership. After all, the regulations came into force over eight months ago.
As I have said before – give the councils the penalty fines to pay for the salaries of enforcement officials and it will encourage motivated councils to sort many of their ills. It would mean proper decentralisation (an in-vogue dream in Westminster these days), more local accountability and could energise local TS to be the guardians of trading misdemeanour’s in their communities. At present they could feel like lottery winners in the places where I live and work! It would also drive out the bad landlords and agents more effectively thereby passing more business on to those who do it properly and protect tenants and landlords alike from the rogue and “have-a-go” agents.
Requiring landlords who do not use accredited agents to acquire a license which has minimum standards and who would be held accountable to them by TS would also hold this part of the sector to account and also to have the ultimate sanction of confiscation of property and a penultimate one of force management by accredited agents would mean that those who go under the radar can be shopped by the local community and lose the right to their ill gotten gains and extortion
Bodies like local councils, Trading Standards, CMA, ASA etc. are struggling to enforce the 700+ regulations that now govern what we do. Only this week there was an article about how Trading Standards are struggling. It is for this reason I am against introducing yet more regulation to our industry when the industry as a whole is not complying with what we already have. In the meantime the people who endeavour to comply with everything thrown at them are doing so at cost. Trade associations who issue expensive window stickers and codes of practice may as well run them through the shredder as most members I know haven’t even read them and the trade associations will not enforce their codes for fear of cutting off the hand that feeds 🙂
I have been banging on about this locally for months. We duly joined a scheme knowing full well many others would not. I reported several to Trading Standards who were not the slightest bit interested (nor knowledgeable) on the matter. Like others have said, what’e the point in rules if they are not enforced. We’re trying to stand out as one of the better landlords/agencies in our area and whilst we comply with all the latest legislation, others do not which puts us at an unfair disadvantage.
the redress scheme can and does get abused. If the complainant had to fund part of it even a token amount of say £30 to start a complaint I bet a lot would not bother. That was why before the redress schemes going to court weeded out superficial claims. Nothing wrong with going to court if you think you had a good case – got a moan, a whinge, oh yes a free redress scheme.
I see your point but in my experience you need to really offer a poor service for somebody to go to the effort or involving a redress scheme, usually a sincere apology (if warranted or not) goes a long way.
As little as £100 to join a redress scheme, you have to wonder why these agents do not comply?
Like the European Union with its “ever closer union” we seem to have new regulations every couple of months. They are rarely enforced so eventually people take a commercial view on them and think why bother. We jump through all the hoops and it definately puts us at a disadvantage to other agents. I dont think I have ever had to order a reprint on our Instruction forms because we have naturally run out. We always have to reprint because of new laws, rules or logo changes!
Unfortunately, it is not surprising that the “authorities” are behind the curve on enforcing the various new rules & regulations. Very annoying (& expensive) for those that do comply, but unsurprising !
It’s disgusting and a kick in the face for those agencies that comply – many of them possibly putting themselves at a competitive disadvantage as a result.
It’s certainly proving difficult to find agencies that DO comply. Some that don’t are Arla agents, who have no excuse since Arla have been very supportive and even provided templates for the display of both landlord and tenant fees, as well as a flow of information and reminders. So it must be a conscious decision, by some, if not all, to flout the law. (They no doubt have little respect for the law given its track record of poor policing and enforcing.)
Well done you I am sick of these companies getting away with this we are a small independant in the South and it drives me mad that so many are still flouting the law about time the councils/government got their act together to police the laws they put in place.
It’s not just redress. Our local trading standards office knew nothing about the stuff that came in on 27th May and argued it wasn’t enforceable until October!
After double checking the TPOS advisory was correct, they’ve now taken up my complaint against 14 agents, including some of the country’s largest networks.