Call to clamp down on unscrupulous letting agents

By Emma Forde
5 live Investigates

image captionThe Property Ombudsman received more than 8,000 complaints about letting agents in 2012

More must be done to help clamp down on rogue letting agents, industry experts and disgruntled tenants have told the BBC.

An amendment to regulate letting agents is due before the House of Commons next week.

If approved, the changes would see agents required by law to belong to an ombudsman scheme.

Figures obtained by the BBC show that very few of those acting outside of the law are being punished.

'Warning shot'

The Property Ombudsman (TPO) received more than 8,000 complaints about letting agents from landlords and tenants in 2012 - an increase of 9% on the previous year.

But the BBC's 5 live Investigates programme has learned that only 12 prosecutions were carried out last year by trading standards teams in 20 of the biggest councils in England, Scotland and Wales.

Andrea Fernandez from Hampstead in London fell victim to a rogue letting agent last year and has been left nearly £3,000 out of pocket.

"I had to move out of the property because there was a serious problem with mice and he wouldn't do anything about it.

"I was waiting to get my deposit back but he was making excuses all the time, trying to charge me for things he could not explain. Then he stopped replying to my emails. He vanished. I tried to get my deposit back but found out it was not protected."

A leading trade body said it was disappointed by the low numbers being prosecuted.

"If there is seen to be a robust procedure then that is itself a deterrent," said Ian Potter, managing director of the Association of Residential Letting Agents (ARLA).

"We do know that a lot of local authorities work very hard when they get a complaint to try to get bad practice improved but I think what prosecution does do is send a warning shot across the bows of anyone that is not operating properly in a market place."

But trading standards officers said prosecutions were a last resort.

"If you had very high numbers of prosecutions, that means that trading standards have not succeeded in bringing about compliance," said Karen Ford from the Association of Chief Trading Standards Officers (ACTSO).

"It is not the case that we get a breach and therefore we go in and prosecute, because that's the polar opposite of what we should be doing," she added.

Compulsory regulation

Since 2008 estate agents have been required by law to be part of an approved redress scheme, but letting agents are not.

Labour peer Baroness Hayter of Kentish Town is proposing the amendments to the current Enterprise and Regulatory Reform (ERR) Bill to change that.

"Legislation already requires estate agents to be part of an ombudsman scheme. What this amendment would do is extend that so that letting agents would also have to be members of an ombudsman scheme," she said.

"At the moment anybody could set up as a letting agent. They don't have to promise to give minimum standards to the tenants or to the landlords."

The proposal is due before the House of Commons on 16 April.

"People living in private rented homes should be treated fairly and honestly, but we want to avoid excessive red tape that would push up the cost of rents and reduce choice for tenants," a spokesman from the Department for Communities and Local Government said.

"The first priority must be to make sure that landlords and tenants are well informed and empowered to exercise their rights. Agents are subject to consumer protection laws and dissatisfied customers can report bad practice to local trading standards officers," he added.

Illegal charges

In Scotland, measures have recently been taken to regulate the lettings industry.

The law currently prohibits prospective tenants being charged "premiums" on top of their deposit and rent in advance, but some letting agents have been charging various fees for years.

In November 2012 a clarification of the law was put through the Scottish Parliament which states that additional charges such as reference checks, credit checks and inventory fees are unlawful.

But a mystery shopper exercise carried out by 5 live Investigates found that some letting agents were still charging fees.

The programme contacted 25 letting agents across Scotland and found a quarter were still passing charges onto tenants.

You can hear the full report on 5 live Investigates on Sunday, 14 April, at 11:00 BST on BBC 5 live.

Listen again via the 5 live website or by downloading the 5 live Investigates podcast.

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