What happens if you don't comply with the Tenant Fees Act 2019 and other letting agency legislation.
If you don't comply with this legislation you could be:
- issued with a financial penalty (fined)
- prosecuted for a second or subsequent breach of sections 1 or 2 of the TFA 2019
- banned from engaging in letting agency or property management work, if prosecuted under the TFA 2019
Charging a prohibited payment
If you don't comply with the holding deposit requirements, you're breaching schedule 2 of the Tenant Fees Act 2019.
For a first breach, you could be issued with a financial penalty of up to £5,000.
You may also have to repay the prohibited payment to the tenant.
If you breach sections 1 or 2 again within the next 5 years, you could be:
- issued with a financial penalty of up to £30,000, or
- prosecuted and get an unlimited fine
If you're prosecuted, the local housing authority may apply for a banning order against you. This can prevent you from:
- letting a house in England
- engaging in English letting agency work
- engaging in English property management work
- being involved in any corporate body that carries out an activity you're banned from
The First-tier Tribunal decides whether an order should be imposed and for how long.
For more information, see the guidance document on banning order offences issued by the Department for Levelling Up, Housing and Communities (DLUHC).
Not belonging to a client money protection scheme
You must belong to a client money protection scheme, as required by regulation 3 of the Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019.
If you don't belong to a scheme, you could be issued with a financial penalty of up to £30,000.
You must also comply with the transparency requirements under regulation 4 of the Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019.
If you don't comply with the transparency requirements, for example if you don't display your certificate or state which client money protection scheme you belong to, you could be issued with a financial penalty of up to £5,000.
Not displaying a list of fees
Section 83 of the Consumer Rights Act 2015, states you must display a list of fees:
- at your premises
- on your website
- on any third party website you use (including your redress and CMP Scheme membership information)
If you don't, you could get a financial penalty (fine) of up to £5,000 for each breach.
Not belonging to a redress scheme
You must belong to a government approved or designated redress scheme, as per articles 3 or 5 of the Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014.
If you don't, you could get a monetary penalty of up to £5,000.
If you're a letting agent who also engages in residential estate agency work, you must make sure your scheme membership also covers your estate agency work. If it doesn't, you could get a separate penalty of £1,000.
See our guidance on property sales for more information.
Who can enforce the legislation
The legislation can be enforced by:
- your local weights and measures authority, usually your local trading standards service
- your local district council
- the National Trading Standards Estate and Letting Agency Team (NTSELAT)