Newham Council tackles poor practices in the lettings industry

4 August 2014 in Council and democracy and Housing and Mayor
Newham Council is the first local authority in the country to stand up for private tenants and landlords who are being exploited by rip-off letting agents flouting the law.
An initiative by the council to tackle poor practice by lettings agents and protect tenants has helped to improve standards in the profession with the majority of agents now complying with the law.

The Fair Lettings Project was introduced to ensure letting agents in Newham were complying with legislation to stop tenants from being exploited. The project also aims raise standards in the industry which will also benefit landlords. Complaints regarding letting agents have increased significantly in recent years, both locally and nationally. The Competition and Markets Authority has highlighted unfair and illegal charging practices affecting both private tenants and landlords.

Since November 2013, officers have visited 197 known letting agents in the borough to check their conditions. From these visits, 113 notices for corrective actions have been issued. Most are now either fully or broadly compliant with current consumer protection and housing legislation. The council has also been able to recover thousands of pounds of tenants’ deposit money, illegally retained by letting agents.

Four agents stopped trading after the first visit, two letting agents have been prosecuted and another five will have legal action taken against them. One letting agent, Zulfikar Shakur from Homes 4u Direct, pleaded guilty at Thames Magistrates Court to two offences under the Consumer Protection from Unfair Trading Regulations 2008. The offences were not having transparent fees and charges and not displaying the maximum occupancy level which is required as part of the private sector licensing scheme. He was sentenced to a 12 month conditional discharge and ordered to pay a £15 victim surcharge and £500 court costs within 28 days.

Also as a result of the project, there are a further 32 letting agents under investigation. Ten penalty charge notices (PCN) of £1,000 have also been issued to letting agents who are also acting as estate agents but do not belong to an approved redress scheme.

The council is working with national professional bodies including the National Approved Lettings Scheme (NALS) and the Association of Residential Letting Agents (ARLA) to set the standards expected of all agents operating in Newham. All letting agents in Newham are expected to:
  • Provide full information and clarity on all fees and charges to all parties
  • Provide tenants with a copy of any property licence and information on the licensing conditions
  • Ensure all third party deposits are registered in an approved tenancy deposit scheme
  • Correctly returning all holding deposits without illegal deductions
  • Always providing accurate information to landlords and tenants
  • Membership of reputable trade bodies and professional associations.
Sir Robin Wales, Mayor of Newham said: “The Fair Lettings Project has been a great success with the majority of letting agents now operating within the law. We have already seen the prosecution of one letting agent who continued to work illegally which is to the detriment of both tenants and landlords.

“Forty per cent of all Newham households rent privately and many depend on a largely unregulated industry. It is encouraging that so many of the letting agents are now complying with the law and we will support those who need help and assistance. The project complements our private sector licensing scheme which has already raised standards across the private sector. We will continue to work hard to ensure Newham residents who rent privately are not exploited and get a decent roof over their head.”