Letting agents face court action if they don’t stick to new rules banning tenant fees

A NEW watchdog has been set up to make sure rogue letting agents don’t rip-off tenants after a ban on unfair fees comes into force on June 1.

The National Trading Standards Estate and Letting Agency Team (NTSELAT) will be able to take agencies to court if they are found to be fleecing renters.

 A new watchdog has been set up to make sure estate agents don't charge tenants rip-off fees

Getty – Contributor

A new watchdog has been set up to make sure estate agents don’t charge tenants rip-off fees

Once in court, guilty letting and sales agents face being slapped with an unlimited fine or even a prison sentence.

The Tenant Fee Act will stop agents charging renters rip-off rates of around £432 per tenant when taking on a new agreement.

It comes as one letting agency even charged tenants £300 to view a property.

But while the NTSELAT won’t have the power to look into individual cases – that complaints procedure will still be carried out by the Property Ombudsman – it will take actions against rogue traders.

It will also oversee redress schemes – making sure agents payout to renters where ordered to do so by the Property Ombudsman.

The new regulator will be lead by Trading Standards at Bristol City Council and Powys County Council and it will only step in if the local authority is unable to resolve an issue.

Ban on letting agent fees

THE Tenant Fees Bill bans letting fees paid by tenants in the private rented sector.

Housing charity Shelter says tenants shell out an average of £272 in fees, so this will save people a pretty penny.

But experts have warned that renters could still be open to being charged “default fees” – such as when they lose their key or breach their contract.

Under the rules, agents and landlords will still be allowed tenants fees associated with:

  • a change or early termination of a tenancy requested by the tenant – but this will be capped at £50 unless the landlord or agent can demonstrate that greater costs were incurred
  • utilities, communication services and council tax
  • payments arising from a default by the tenant, such as replacing a lost key.

Landlords and estate agents will also only be able to recover “reasonable costs”.

For example, they won’t be able to charge tenants hundreds of pounds for a damaged item that actually only costs a few pounds to replace.

So if you have a complaint about unfair fees after June 1, you first report it to your local authority’s trading standards, which would try and sort it out.

But if it couldn’t, then that’s when NTSELAT would overlook the case.

James Munro, who already heads up the National Trading Standards Estate Agency Team, will expand his role to include overseeing that letting agents in England are sticking to the rules.

He said: “This single team approach will help us uphold consumers’ rights and enforce the law.”

Housing minister Heather Wheeler MP said that the Government is “determined to make the private rented sector fairer”.

She added: “There is no place for unfair fees – now, with this new enforcement authority, we will be able to stamp them out.”

David Cox, chief executive trade body for the letting industry ARLA Propertymark, described the new regulator as a “major step forward” in improving the private rented sector.

He said: “At the moment, there is a severe lack of prosecution in the industry, allowing rogue agents to operate and thrive.

“We look forward to building a constructive working relationship with the lead enforcement authority to eliminate these agents from the sector once and for all.”

The fees ban is expected to cost the estate agent industry £200million, which has lead to some experts warning that the ban could push up rents by £100 a year, if agents decide to plug the gap.

Renters are expected to spend a combined £154MILLION on tenant fees ahead of the ban, which is why we’ve put together a guide on how to drive down the costs if you have to move before the ban comes into play.

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