Agency Redress Scheme:

Birmingham City Council has put out a reminder to all letting agents for the New Year for both Letting Agencies and Property Managers to register with a Redress Scheme, or face a £5k fine.

On 1 October 2014, new rules came into force which mean that all Lettings Agents and Property Managers involved in letting agency work and/or property management work in the private rented sector are required to be registered with a Secretary of State Approved Redress Scheme.

The currently approved redress schemes are:

  • The Property Ombudsman Limited,
  • Ombudsman Services, and
  • Property Redress Scheme.
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Registration can be as little as £95 (+VAT) per year says Birmingham Council.

Those agencies who are members of the recognised professional associations may already be covered, but you should check.

When a local authority is satisfied, on the balance of probabilities, that a person who is required to register has not registered with a Redress scheme, they can apply a monetary penalty up to a limit of £5,000.

Last year Birmingham City Council successfully prosecuted a Lettings Agency that had failed to register with a Redress Scheme.

The council investigated the Birmingham–based company after a member of the public contacted the council’s private rented services team and a notice to impose the maximum financial penalty of £5,000 was served on 20 November 2015.

The company appealed against the imposition of the penalty to a First Tier Tribunal.  After taking into consideration the written submissions of both parties the Tribunal reduced the penalty to £4,200 – still a sizeable sum given that registration would have cost the company just a little over £100.

Birmingham City Council’s cabinet member for housing and homes, Cllr Peter Griffiths, says:

“The idea behind the Redress Scheme is to help tenants with a range of issues such as letting agent fees, inaccurate property descriptions, and disputes over deposits and rent not being passed onto their landlord.  Registration is simple and relatively cheap at £95 plus VAT.  If you don’t register you could face a fine of up to £5,000.”

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