The Residential Landlords Association has called on the government to actively enforce compulsory fee disclosure.
It has been mandatory for letting agents to publish details of the fees that they charge landlords and tenants since May 2015, when the move was brought in as part of the Consumer Rights Act. Those who fail to comply could be fined up to £5,000, however in practice this does not happen. Statistics have shown that the regulations have barely been enforced.
The National Approved Letting Scheme (NALS) has revealed that since it became a legal requirement for agents to disclose their fees two years ago, 93 per cent of councils have failed to administer a single conviction. Just three penalty notices have been served across the entire of the UK.
Furthermore, 59 per cent of councils have admitted that they do not deem the failure to display fees as a high priority, whilst 45 per cent say that they only undertake reactive enforcement activity.
As a result, the RLA is urging the government to improve the enforcement of existing compulsory fee disclosure regulations designed to encourage landlords to display fees before looking to introduce a blanket ban.
The RLA argues that the government should force agents to display the fees they charge in more detail and in prominent positions. The organisation, which represents 50,000 landlords, also suggests that the fee for non-compliance should be raised to £30,000 rather than the current £5,000 which does not act as enough of a deterrent.
RLA’s policy director, David Smith, explains: ‘Laws without proper enforcement serve only to let tenants and good landlords down. Rather than pressing ahead with plans for more legislation in the sector to ban letting agent fees at an unknown time in the future, Ministers could achieve greater and earlier impact by using the powers they already have to improve transparency and introduce far tougher penalties for agents found to be breaching the law. This would send a clear message that enforcing bodies will not tolerate any letting agents flouting the law.’