A London-wide trading standards campaign is enforcing fines of up to £30,000 for letting agents that fail to protect landlords’ and tenants’ money.
It has been a legal requirement since April 2019 for letting agents to belong to an approved Client Money Protection scheme, in order to ensure that landlords and tenants are protected if the business fails.
Agents are also required to belong to an approved Redress scheme and to display their CMP certificate and other information on their website and in their offices.
There are thousands of letting agents in London, each handling significant amounts of their clients’ money, so non-compliance with the law could have potentially disastrous consequences. The enforcement campaign has already identified hundreds of cases where there is evidence of a breach of the law.
Almost 100 of these have been served with a formal ‘Notice of Intent’ by their local council, informing them that they could face financial penalties. Many more are likely to receive similar notices in the coming weeks.
Financial penalties can be up to £30,000 for failure to belong to a CMP scheme, and up to £5,000 for other breaches of the law.
The push to crack down on rogue elements in the renting sector is being spearheaded by London Trading Standards (LTS) – a partnership body of the 33 London local authority trading standards services – and the National Trading Standards Estate and Letting Agency Team, with funding from the Ministry of Housing, Communities and Local Government (MHCLG).
Nishi Patel, Chair of LTS, said: “London letting agents are handling billions of pounds of tenants’ and landlords’ money every year, so it’s vital that this money is protected in the event of business failure. London borough trading standards teams have been increasingly active in tackling rogue lettings agents in recent years, and this London-wide operation has enabled us to step-up our efforts to a new level. I warn any London agents out there who think they can get away with failing to comply with the law that they need to think again and get their affairs in order without delay.”
James Munro, head of the National Trading Standards Estate and Letting Agency Team, said: “Our officers are providing advice and guidance to support this landmark enforcement initiative, helping to safeguard billions of pounds of consumers’ money. The intelligence gathered from this campaign will be used to support local authority investigations across the country, which will help protect consumers, raise compliance across the industry and boost consumer confidence.
“Agents who hold client money are required by law to be registered with an approved CMP scheme – and to inform tenants who they are registered with.”
London’s Deputy Mayor for Housing and Residential Development, Tom Copley said: “With nearly three million Londoners renting their home, it is vital that both tenants and landlords have absolute faith in the letting agents who are handling their money.
“Trading standards officers are London’s first line of defence against unlawful letting agent activity, which puts both renters and landlords at risk. The Mayor and I will continue to support their vital work and lobby the Government to ensure they have the powers and resources they need to tackle rogue agents.”