Rip-off letting agents face ban under new law

The thousands of London tenants at the mercy of rogue letting agents are to get full legal protection for the first time.

All agents will be forced to join a government approved ombudsman-type scheme under a clampdown announced today in the Commons.

This will give tenants and landlords who are ripped off by agents the chance to get their money back without having to go through the courts. Agents that refuse to comply will face heavy fines and could be banned from trading.

The long-awaited move follows exposés of widespread scams such as huge “hidden” upfront fees and wrongly withheld deposits.

Housing minister Mark Prisk said the decision had also been influenced by the Standard’s coverage of the problems facing tenants in London.

He said: “All Evening Standard readers who are tenants will have a means of redress. This will be good news for tenants in London and elsewhere in the country.”

Hundreds of small-scale unregulated agencies have sprung up all over London in recent years as the number of tenants looking for places to rent has dramatically increased.

But while complaints about “fly-by- night” letting agents have soared, they are not required to join a redress scheme with legal teeth — unlike estate agents.

Tenants and landlords who are ripped off by any of the 40 per cent agents who have not voluntarily joined a scheme currently face a huge struggle getting their money back through the courts. A recent BBC investigation found only 12 prosecutions of letting agents were carried out by trading standards teams in the country’s 20 biggest councils.

Today’s change, which is likely to become law by the autumn, was widely welcomed throughout the property industry.

Ed Mead of central London estate agents Douglas & Gordon said: “The daft thing is that letting agents handle cash and sales agents don’t. Yet all sales agents are forced to register with a redress scheme whereas letting agents are not and 40 per cent choose not to.”

It is being brought about through a Coalition amendment to the Enterprise and Regulatory Reform Bill being debated in the Commons today.