A London council’s crackdown on letting agents has led to more than 100 firms ‘yellow carded’ as a warning about poor business practices.
Newham Council, East London, carried out business checks on 197 letting agents in the borough and served 113 notices cautioning against unfair or illegal business conduct affecting landlords and tenants.
The checks also resulted in thousands of pounds of tenant deposit money going on protection illegally held by letting agents.
The council says that as a result of the action, four firms have shut up shop, two have faced prosecution and another five court cases are in the pipeline.
The council has 32 more letting agents under investigation, while 10 agents have been fined £1,000 each for failing to protect landlord and tenant cash in an approved redress scheme.
Sir Robin Wales, Mayor of Newham said: “The Fair Lettings Project has been a great success with the majority of letting agents now operating within the law. We have already seen the prosecution of one letting agent who continued to work illegally which is to the detriment of both tenants and landlords.
“Around 40% of all Newham households rent privately and many depend on a largely unregulated industry. It is encouraging that so many of the letting agents are now complying with the law and we will support those who need help and assistance.
The council has drafted a code of conduct for letting agents in the borough, which demands they:
- Provide clear information about fees and charges relating to a letting
- Provide tenants with a copy of an house in multiple occupation (HMO) licence and details of the licensing conditions
- make sure all deposits are protected in an approved scheme
- Return holding deposits without illegal deductions
- Belong to a recognised trade body or professional associations.
“The project complements our private sector licensing scheme which has already raised standards across the private sector. We will continue to work hard to ensure Newham residents who rent privately are not exploited and get a decent roof over their head,” said the mayor.