26th August 2021

At home with the Tenant Fees Act

Two years on from the introduction of the Tenant Fees Act 2019, what impact has the legislation had on the lives of tenants?

By Alison Farrar and Emma Cooke
CTSI Joint Lead Officers for Property and Lettings
Tenants are in an extremely vulnerable position, and often they are too scared to make a complaint
Our advice to trading standards colleagues is to treat these cases in the same way you would a loan shark or doorstep crime victim

The Tenant Fees Act 2019 came into force in England on June 1, 2019 and brought with it a number of new challenges for trading standards. The legislation was intended to get rid of the fees charged to tenants before, during and after a tenancy, and to provide a framework to bring together Redress and Client Money Protection legislation.

The National Trading Standards Estate and Letting Agency Team was formed when the existing team hosted by Powys County Council as Lead Enforcement Authority for The Estate Agents Act 1979 partnered up with Bristol City Council, who were appointed Lead Enforcement Authority for The Tenants Fees Act 2019. Funding was provided for the new joint team to provide training to enforcement officers across England and to write guidance for the sector.

We identified early on that most trading standards officers didn’t often deal with tenancies and would normally have passed this type of complaint on to their colleagues in Housing or Environmental Health. The Consumer Rights Act 2015 (s83 to s88) covers the duty of letting agents to display fees, but many officers concentrated on the other sections in relation to goods, services, and investigatory powers. Housing and Environmental Health colleagues were already working on cases where tenants were complaining about the standard of their accommodation, failure to conduct repairs, and overcrowding.

Often these complaints led to harassment of the tenant and illegal evictions. Complaints soon started coming in from tenants who were being charged fees which were now prohibited under the new legislation.

The team started preparing an e-learning course as well as providing face to face training in each English region and invitations went out to all local authority officers. We asked our trading standards teams to reach out to their colleagues and encouraged them to make a start on collaborative projects and making plans to work together in the lettings sector. We created a Knowledge Hub group for enforcement officers to share best practice, ask questions and post links to interesting articles.

Knowledge gap

We soon discovered that despite letting agencies being in the NTS top three priorities there was a lack of intelligence within the usual trading standards systems. The team prioritised this and approached several agencies to start sharing intelligence.

Officers may notice that trade association and Redress scheme expulsions are now disseminated and HMRC anti-money laundering supervision lists are shared with local authorities. The Client Money Protection and Deposit Protection schemes now speak to us about emerging threats and current trends. The Redress schemes go one step further and refer cases to us when they start to receive multiple complaints about an agent, which means that we can pass these cases on for investigation. We have also started working with police forces across the country on disruption of organised crime group (OCG) activity within rented properties.

In 2020 the Ministry of Housing, Communities and Local Government offered funding to projects across England to improve lettings enforcement. The team has worked with each of these projects and is planning support for successful bidders for this year’s funding. This means that the team has been able to assist local authorities in enforcing the Tenant Fees Act if the authority was unable to due to COVID-19 responsibilities. Some authorities have been unable to get their penalty policies approved as scrutiny committees have not met, and there have been other challenges such as working out powers within district councils.

Lingering problems

The Tenant Fees Act has changed the way that landlords and letting agents make a profit. Previously a tenant was forced to pay for all the credit checks, referencing, check in and check out inventories, and often paid a huge deposit. The Tenant Fees Act brought in a list of permitted payments, applied some rules around those payments, and decreed that all other payments are prohibited.

Right from the start we were seeing agents testing the new legislation, finding new ways to keep charging tenants as much as possible. We are still seeing cases of agents charging for professional cleaning, adding their own admin costs onto the genuine cost of replacement keys, and trying to circumvent the five-week deposit cap by offering different options with less protection.

It is now two years since the legislation came into force and many agencies are still charging students reduced summer rents despite the legislation stating that rent payments must be in equal instalments.

The Redress, Deposit Protection and Client Money Protection schemes all tell us they are receiving disputes over the return of deposits, where the agent or landlord claims that professional cleaning and chimney sweeping should come out of the deposit which the tenant is expecting to get back in full. Agents are refusing to provide a reference unless the tenant pays for it and are adding their loss of monthly fees to the amount a tenant must pay to surrender a tenancy early, even when a new tenant is found, and no loss has occurred.

We have heard some horror stories from tenants who have struggled to pay during the last few months. As evictions were not legally possible, some landlords and agents were resorting to other methods to recoup their lost rents. Tenants have been forced to allow a new tenant to move in with them or use a spare room for cannabis farms or storage for OCG activity, and we have seen the start of the first “sex for rent” prosecution.

All this reinforces our belief that tenants are in an extremely vulnerable position, and often they are too scared to make a complaint.

Our advice to trading standards colleagues is to treat these cases in the same way you would a loan shark or doorstep crime victim, and work with Social Services and the Local Safeguarding Board to protect the victim from further harm. Our colleagues in Environmental Health and Housing are experienced in dealing with people at risk of homelessness and those who feel threatened after making a complaint.

We’re finding that the collaborative approach to tenancy complaints works best. When professionals from trading standards, Environmental Health and Housing work together to tackle an issue, it’s amazing to see how easily we can have a positive impact. We all have different legislation to enforce and a variety of powers in our tookit, which can only be a good thing for the victims as well as the agents and landlords who benefit from robust enforcement and clear guidance.

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