Under legislation which came into effect in 2019, letting agents are required to sign up to a “Client Money Protection” scheme that safeguards the money of tenants and landlords if an agent’s business fails.
But trading standards officers say that hundreds of agents in the capital are flouting the law by failing to comply with this and other legal requirements, and are preparing a purge to punish wrongdoers.
Around 100 have already been warned that they face a fine if they fail to comply with the law within 28 days and action against others is intended.
Announcing the crackdown, Nishi Patel, the chair of London Trading Standards, added: “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.
“Agents who think they can get away with failing to comply with the law need to think again.”
Tom Copley, London’s deputy mayor for housing, added that with nearly three million Londoners renting their homes, “it is vital that both tenants and landlords have absolute faith in the letting agents who are handling their money.”
The maximum penalty for failing to belong to an approved client money protection scheme is £30,000.
Agents are also required by law to publish their certificate of membership and other key information at their offices and on their websites. In addition, they must also belong to one of two government authorised “redress” schemes which can be used to resolve disputes. Failure to comply with their requirement carries a potential £5,000 penalty.
The enforcement operation is being run by London Trading Standards, which coordinates the activities of trading standards officers in the capital’s 32 boroughs and the City of London, and the National Trading Standards Estate and Letting Agency Team.
Councillor Darren Rodwell, London Councils’ executive member for housing and planning, said the aim was to stop “rogue letting agents making life miserable” for tenants and landlords.
He added: “The hefty fines being issued should make clear that bad practice is unacceptable.”
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