News

02.06.17

Most councils fail to enforce estate agents displaying hidden letting fees

Almost all local authorities are currently failing to enforce new rules that force letting agents to display hidden fees to tenants.

Since 2015, letting agents have been required by law to clearly state any agency fees to prospective tenants. 

But a Freedom of Information (FoI) investigation by the National Approved Letting Scheme (NALS) has found that 93% of councils have not issued a single financial penalty for agents not complying with this new law.

The request asked councils a number of questions on the Consumer Rights Act legislation on displaying fees and how the new rules were being enforced.

It found that in England, only three penalty notices were served for agents or landlords who failed to display fees – and of these only one had been enforced and paid in full.

But the fact that so few councils have enforced the rule may point to the fact that the level of penalty is not right to cover the cost of enforcement, the NALS argued.

Other revelations from the FoI include that 59% of councils did not consider enforcing the rule a priority, whilst a third of authorities allocated no staffing resources to this area in 2016-17.

It also comes after the government opened a consultation that could see unfair agents’ fees banned altogether.

“We’re clearly concerned by these results and the disconnect between government’s aspirations with consumer protection legislation and the reality of delivery through enforcement,” said Isobel Thomson, chief executive of NALS.

“We recognise Trading Standards teams are underfunded and under-resourced, but if local authorities aren’t enforcing the current legislation what will make things different when the fee ban is implemented?”

Thomson also called for more sufficient, robust and coherent enforcement action to reduce the criminal activity going on in the private rental sector.

“They [agents and landlords] will continue to operate knowing they won’t face any penalty and it’s the consumer who will continue to suffer,” she concluded. “We believe now is the time to start a constructive dialogue with the Chartered Trading Standards Institute (CTSI) and its members on how we can work together to stamp out the rogues.”

Leon Livermore, chief executive of the CTSI, argued that his organisation welcomed the NALS research and “believes that it highlights the issues of the robust enforcement needed for existing regulation that can deliver for the consumer”.

“We look forward to further engagement with NALS,” said Livermore.

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