People Insights
Contact Us
Get in touch
Contact Us
Published On: August 13, 2018 | Blog | 0 comments

How much can a letting agent be fined for not displaying their fees?

Letting agents are under a legal duty to display certain information in their offices and on their websites. Section 83 of the Consumer Rights Act 2015 requires agents to have a list of their fees for landlords and tenants which contains:

  1. A description of each fee which is sufficient to allow a customer to understand what work the fee covers;
  2. For tenant fees, an explanation of whether the fee is per tenant or per property;
  3. A statement of whether the agent is a member of a client money protection scheme; and
  4. Where the agent is required to be a member of a redress scheme, confirmation that they are a member of a redress scheme, and the name of the scheme.

The same information should be displayed on the agent’s website.

Some trading standards authorities in London have been particularly active in issuing fines against letting agents. The maximum fine for failing for breaching section 83 of the Consumer Rights Act 2015 is £5,000, but the drafting of the legislation has left considerable doubt over what the appropriate level of fine is, and in what circumstances a local authority may issue more than one fine to the same agent.

Fines are set by local authority trading standards departments, and many officers take the view that £5,000 fines should be the norm. This was the Government’s view in a piece of guidance issued during the passage of the Consumer Rights Bill, but the Act itself does not specify that £5,000 is the norm or the starting point. As the guidance was issued before the Bill became law its validity is also open to doubt.

Another issue arises where the trading standards officer alleges that there have been multiple breaches – either because the fees poster has multiple deficiencies, or because the agent fails to correct the problem and when trading standards officers visit a second time the poster has not been fixed. The Act states “Only one penalty under this section may be imposed on the same letting agent in respect of the same breach” but this restriction is not very clear where there is doubt about where one breach ends and the next begins.

Recent appeal decisions demonstrate that there no consensus about how to properly calculate fines under section 83, even among judges.

In a recent First-tier Tribunal appeal Up My Street Ltd v London Borough of Camden [2017] UKFTT 2016_0037 (GRC) the judge declined to uphold a fine of £5,000 on the basis that “the maximum fine should be reserved for the ‘very worst’ rather than the ordinary case”. However, the judge did uphold Camden’s separate fine for failing to publish full details of agents’ landlord fees (reduced to £4,500 on appeal), £3000 for failing to publish details of the agents’ client money protection scheme and £3000 for failing to publish details of the agents’ redress scheme membership.

There is some real doubt over whether such a ‘multiple fine’ is permissible, something which the judge acknowledges in his decision:

  1. I would mention for the benefit of the appellant that there has been some debate between Judges of the First Tier Tribunal (FTT) as to whether it is correct to impose more than one fine in cases such as these. See, for example the decision of Judge Hinchliffe in Top Supports Estate Agents Limited. [2017] UKFTT 2016_0037 (GRC)
  2. Decisions of fellow FTT Judges are not binding on me but in any event, I consider that the issue has been settled by the Upper Tribunal (whose decisions are binding on FTT Judges) by Judge Levenson in Camden v Foxtons Ltd [2017] UKUT 349 (AAC) which I believe clarifies that it is quite appropriate for the local authority to impose more than one fine in cases such as this one.

In Top Supports Estate Agents Limited Judge Hinchliffe concluded that multiple errors in a fees poster was only one breach, and therefore gave rise to one fine of £3,000 only:

I find that Top Supports’ failure to display in their premises both a list of the fees that they charged customers of their letting agency business and also a statement of whether they were a member of a client money protection scheme gives rise to a single breach of s.83 and that a financial penalty of £3,000 in respect of this breach would be reasonable and proportionate in view of the limited financial scale and resources of Top Supports. The Final Notice is therefore varied so as to impose a penalty of £3000 for a single breach of section 83 of the Act. 

The reference to Camden v Foxtons Ltd [2017] UKUT 349 (AAC) (in which Anthony Gold acted for the appellant in the Upper Tribunal) is somewhat confusing as it is not quite clear upon what basis that case can be said to be an authority for the proposition that one fees poster might give rise to multiple breaches. Upper Tribunal Judge Levenson does refer to separate fines for multiple breaches in his decision, but in that case the multiple breaches relate to different branch offices rather than breaches in a single poster.

It is very likely that the basis for calculating these fine will have to be addressed directly by the Upper Tribunal soon. Similar issues arise with financial penalties issued to landlords and agents under the Housing and Planning Act 2016 – since often environmental health officers will often encounter multiple breaches of the Management of Houses in Multiple Occupation (England) Regulations 2006 – and may wish to impose separate fines for each breach.

If you are considering an appeal to the First-tier or Upper Tribunal we can assist. Anthony Gold has particular expertise in tribunal appeals under the Consumer Rights Act 2015, the Housing Act 2004 and the Housing and Planning Act 2016. Please contact Robin Stewart to discuss representation in your appeal.

Robin Stewart

Joint Manager of Private Sector Residential Landlord and Tenant

Get in touch

Call, email or use a contact form – whichever suits you. We’ll let you know the best person to help you get started.

Call or Email

020 7940 4060

No comments

Add your comment

We need your name and email address to make sure you’re a real person. We won’t share your email address with anyone else or send you spam. Please complete fields marked with *.

Leave a Reply

Your email address and phone number will not be published on the website. Other visitors will not be able to see your contact information. Required fields are marked *

Contact Us

How can we help?

Request a Call Back

How can we help?