What happens if you don't comply with the relevant letting agency legislation.
If you're a landlord, letting agent or property manager, you need to comply with the relevant letting agency legislation.
If you don't comply with this legislation you could be:
- issued with a financial penalty (fined) for:
- requiring prohibited payments
- not following the rules on handling of holding deposits
- not belonging to a redress scheme
- not belonging to a client money protection scheme
- not publishing your CMP certificate or not informing clients of a change in CMP membership
- not displaying your fees and membership information
- 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
Requiring a prohibited payment or not following rules on handling of holding deposits
If you don't comply with the holding deposit requirements, you're breaching schedule 2 of the Tenant Fees Act 2019 (TFA 2019) and could be issued with a financial penalty of up to £5,000.
If you require a prohibited payment, you're breaching sections 1 or 2 of the TFA 2019.
For a first breach of section 1 (applies to landlords) or section 2 (applies to letting agents) of the TFA 2019, you could be issued with a financial penalty of up to £5,000. This may be a first breach in real terms, or it may be a second or subsequent breach of section 1 or 2, which does not meet the criteria for an increased penalty or prosecution.
You will also have to repay the prohibited payment to the tenant.
If you're issued with another penalty for breaching section 1 or 2 of the TFA 2019 within 5 years of a previous penalty, 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 Ministry of Housing, Communities and Local Government (MHCLG).
A tenant can dispute a requirement to make a prohibited payment themselves by taking their case directly to the tribunal.
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. This is a penalty under separate estate agency legislation which is not in the remit of NTSLAT. For further information speak to your local trading standards team or the National Trading Standards Estate Agency Team (NTSEAT).
Not belonging to a client money protection scheme
You must belong to a client money protection scheme, as required by regulation 3 of the 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.
Not displaying your client money protection scheme certificate or notifying clients of a change in membership
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 notify your clients of a change in membership, you could be issued with a financial penalty of up to £5,000 per breach.
Not displaying a list of fees or scheme information
Section 83 of the Consumer Rights Act 2015, states you must display a list of relevant fees:
- at your premises
- on your website
- on any third party website you use to advertise property to let
If you're required to belong to a redress scheme or client money protection scheme, you must also publish the name of that scheme with your fees.
If you don't, you could get a financial penalty (fine) of up to £5,000 for each breach.
Who can enforce the legislation
The legislation can be enforced by:
- the relevant local enforcement authority
- the National Trading Standards Letting Agency Team (NTSLAT)