Large letting agents found to be flouting the incoming ban on letting agent fees should receive fines up to £30,000 to ensure greater levels of compliance with the new laws.
This is the message from the Chartered Institute of Environmental Health (CIEH), which says it ‘strongly’ welcomes a ban on all letting agent fees.
The organisation says a blanket ban will help to remove some of the barriers tenants face in moving out of a poor quality home, while ensuring standards can improve in the rental sector.
The fines recommended by CIEH – the body that represents the workforce that carries out rental property inspections – are in line with the recently introduced maximum civil penalty for committing a banning order offence.
The membership body also recommends that holding deposits are included as part of the ban.
It says that they could allow for loopholes to exploit tenants, such as agents hanging onto more than one tenant’s holding deposit for the same property.
The above points were all included in CIEH’s response to the government’s official consultation on the ban, which closed on Friday.
CIEH made several other suggestions as part of its submission. It proposed that tenants should be provided with accessible information on their rights and the obligations of letting agents and how to lodge a complaint with the correct enforcement body.
Meanwhile, it says that the fees ban should also apply to landlords and third parties to avoid additional charges to the tenant via another route.
It also suggests that premium or high-end parts of the market should not be exempt from the ban as it could create loopholes, such as allowing agents to market certain properties as being ‘bespoke’ or ‘upmarket’.
Finally, it argues that there should only be exclusions to the ban for the rent, the refundable deposit and for in-tenancy property management services, where this is due to the tenants’ action.
“The private rented sector is such an important part of the housing market, providing homes for people who otherwise cannot afford to buy their own, especially the vulnerable and those on low incomes,” says Tamara Sandoul, policy manager for CIEH.
“While the vast majority of letting agents are responsible, there are those who exploit tenants by charging them extortionately high fees.”
“A comprehensive ban on letting agents’ fees is a very positive step forward. It will give tenants greater freedom to move out of properties that are hazardous and in poor condition, which in-turn should drive up standards of rented housing.”
She says that her organisation doesn’t expect the ban to contribute towards higher rents because ‘the cost of referencing new tenants is likely to be small in comparison to the costs of maintaining a property to a good standard’.
Sandoul says that the proposed ban will help to increase competition between letting agents and drive down costs.