Hundreds of London’s letting agents are being slapped with warnings that they face a hefty fine for failing to protect landlords’ money.
The capital’s trading standards officers have launched a widescale enforcement operation aimed at cracking down on rogue agents who don’t belong to client money protection (CMP) and redress schemes.
Almost 100 have already been found to have broken the law and served with a formal notice of intent by their local council, warning them about the financial penalty. Many more will receive similar notices over the coming weeks.
These agents have 28 days to provide any evidence or mitigation in their defence before councils make a final decision on issuing a fine – up to £30,000 for failure to belong to a CMP scheme – which ensures tenant and landlord money is protected should the business fail – or up to £5,000 for other breaches of the law.
The enforcement operation is being run by London Trading Standards and the National Trading Standards Estate and Letting Agency Team. Its head, James Munro, says the initiative is helping to safeguard billions of pounds of consumers’ money.
“The intelligence gathered from this campaign will be used to support local authority investigations across the country, which will help protect consumers, raise compliance across the industry and boost consumer confidence,” he says.
Councillor Darren Rodwell (pictured), London Councils’ executive member for housing & planning, adds: “We won’t put up with rogue letting agents making life miserable for their tenant and landlord clients.
“This pan-London project and the hefty fines being issued should make clear to rogue letting agents that bad practice is unacceptable.”
The dangers faced by landlords when agencies stop trading were highlighted last week when, as we reported, a Midlands estate agency went into liquidation owning landlords and tenants £700,000 in rent and deposits.
Happily, the agency had placed most of its deposits in an approved scheme, and the remaining cash was covered by its member of Client Money Protect.