What happens if you don't comply with the Tenant Fees Act 2019 and other letting agency legislation.
If you're a landlord, letting agent or property manager, you need to comply with the Tenant Fees Act 2019 (TFA 2019) and other relevant letting agency legislation.
If you don't comply with this legislation you could be:
- issued with a financial penalty (fined)
- prosecuted for a second or subsequent breach of sections 1 or 2 of the TFA 2019
- banned from engaging in letting agency or property management work, if prosecuted under the TFA 2019
Charging a prohibited payment
If you charge a prohibited payment, you're breaching sections 1 or 2 of the Tenant Fees Act 2019.
If you don't comply with the holding deposit requirements, you're breaching schedule 2 of the Tenant Fees Act 2019.
For a first breach, you could be issued with a financial penalty of up to £5,000.
You may also have to repay the prohibited payment to the tenant.
If you breach sections 1 or 2 again within the next 5 years, you could be:
- issued with a financial penalty of up to £30,000, or
- prosecuted and get an unlimited fine
If you're prosecuted, the local housing authority may apply for a banning order against you. This can prevent you from:
- letting a house in England
- engaging in English letting agency work
- engaging in English property management work
- being involved in any corporate body that carries out an activity you're banned from
The First-tier Tribunal decides whether an order should be imposed and for how long.
For more information, see the guidance document on banning order offences issued by the Department for Levelling Up, Housing and Communities (DLUHC).
Not belonging to a client money protection scheme
You must belong to a client money protection scheme, as required by regulation 3 of the Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019.
If you don't belong to a scheme, you could be issued with a financial penalty of up to £30,000.
You must also comply with the transparency requirements under regulation 4 of the Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019.
If you don't comply with the transparency requirements, for example if you don't display your certificate or state which client money protection scheme you belong to, you could be issued with a financial penalty of up to £5,000.
Not displaying a list of fees
Section 83 of the Consumer Rights Act 2015, states you must display a list of fees:
- at your premises
- on your website
- on any third party website you use (including your redress and CMP Scheme membership information)
If you don't, you could get a financial penalty (fine) of up to £5,000 for each breach.
Not belonging to a redress scheme
You must belong to a government approved or designated redress scheme, as per articles 3 or 5 of the Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014.
If you don't, you could get a monetary penalty of up to £5,000.
If you're a letting agent who also engages in residential estate agency work, you must make sure your scheme membership also covers your estate agency work. If it doesn't, you could get a separate penalty of £1,000.
See our guidance on property sales for more information.
Who can enforce the legislation
The legislation can be enforced by:
- your local weights and measures authority, usually your local trading standards service
- your local district council
- the National Trading Standards Estate and Letting Agency Team (NTSELAT)
What regulation you need to comply with if you collect information about individuals.
If you collect information about individuals for any reason other than your own personal, family or household purposes, you need to comply with the UK data protection regime set out in:
- the Data Protection Act 2018 (DPA 2018)
- the UK General Data Protection Regulation (UK GDPR)
If you're a letting agent or property manager, it’s highly likely you’ll need to comply with Data Protection legislation.
ICO fees
Under the Data Protection (Charges and Information) Regulations 2018, every organisation or sole trader who processes personal information must pay a data protection fee to the Information Commissioners Office (ICO), unless they’re exempt. The fees range from £40 to £2,900 depending on the size and type of your organisation and your turnover.
The ICO regulates data protection in the UK. They’ve produced a data protection guide and an online self-assessment tool to help you understand if you need to pay a data protection fee.
How letting agents can protect against money laundering.
HMRC and supervision of money laundering regulations
Letting agency businesses receiving rent of 10,000 euros or more per month for the duration of at least one month (10,000 euros threshold is per property, not per landlord) must comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
These regulations make sure businesses at risk of being used for money laundering by criminals and terrorists have controls to minimise the risk of this happening.
HM Revenue and Customs (HMRC) has guidance for letting agency businesses about recognising and reducing the risk of money laundering.
HMRC supervise letting agencies under the regulations. If you fall under the requirements of the regulations, you must be registered with HMRC for anti-money laundering supervision. It’s an offence not to register.
Energy Performance of Buildings Regulations and Minimum Level of Energy Efficiency Standard.
The Energy Performance of Buildings (England and Wales) Regulations 2012 state a landlord must make sure that an Energy Performance Certificate (EPC) has been commissioned before the property is advertised to rent. The GOV.UK page on Energy Performance Certificates has information on how to do this.
The person acting on behalf of the landlord, for instance, the letting agent, must make sure an EPC has been commissioned. Every reasonable step must be taken to get the EPC within 7 days from the date the building goes on the market.
If, having taken all reasonable steps, the EPC is not obtained after 7 days, the time limit is extended for another 21 days.
After a total of 28 days, if the building is still being marketed without an EPC, the local weights and measures authority may issue a penalty charge notice (a fine) to the landlord or the letting agent.
The fine is:
- £200 per property, for a dwelling
- £500 minimum per property, for a building that isn’t a dwelling
The energy performance rating from the EPC must be included in any advertisement of a property offered for rent in commercial media.
The local weights and measures authority may issue a penalty charge of £200 where they believe there has been a breach of this duty.
The EPC must be provided by the landlord to a prospective tenant as soon as possible, and no later than:
- when information about the property is first made available by the landlord in writing, or
- when the prospective tenant views the property
The landlord must also give the tenant a copy of the EPC at the start of tenancy, free of charge.
Minimum level of energy efficiency standard
The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (the MEES regulations) set a minimum energy efficiency level for domestic private rented properties.
The MEES regulations apply to all domestic private rented properties that are:
- let on specific types of tenancy agreement
- legally required to have an Energy Performance Certificate (EPC)
Under the MEES regulations, landlords cannot let properties with an EPC rating of F or G, unless they have an exemption in place.
The Department for Business, Energy and Industrial Strategy (BEIS) has created guidance for landlords of domestic private rented property on how to comply with the MEES regulations.
Government tenancy deposit schemes, when you need to protect a tenancy deposit, what happens if you don’t.
A tenancy deposit must be protected in a government authorised tenancy deposit scheme. This is in addition to the requirements for tenancy deposits under the Tenant Fees Act 2019.
Government authorised tenancy deposit schemes
There are three government authorised tenancy deposit schemes:
You must protect the tenancy deposit in one of the 3 schemes and provide specific information to the tenant within 30 days of getting it.
Alternative to tenancy deposit schemes
Most tenancy deposits need protection.
One example of an alternative to a tenancy deposit is where a tenant pays a non-refundable, up-front fee with additional non-refundable payments required on a monthly or annual basis.
Depending on the alternative scheme, the tenant can still be liable for additional charges at the end of the tenancy, like damages and unpaid rent.
The Tenant Fees Act 2019 prohibits some fees that a landlord or letting agent can charge a tenant. A landlord or letting agent can only offer an alternative deposit option to the tenant alongside a traditional tenancy deposit.
If a landlord or letting agent does not explain how an alternative deposit scheme works to a tenant, this could be a breach of the Consumer Protection from Unfair Trading Regulations 2008.
What happens if you should protect a deposit and you don’t
If you must protect a deposit and you don’t, you could face enforcement action by your local authority under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). See our section on the CPRs for more information.
Tenants can also take their own action if:
- a deposit has not been protected at all or outside the 30 days timeframe
- the information you must give to them is:
- not supplied at all
- supplied outside the 30 days timeframe
Who to contact for more information on tenancy deposits
For more information on your duties in relation to tenancy deposits, contact:
- the three authorised tenancy deposit schemes
- your local authority trading standards service
- your local authority housing team
- your professional body or trade association
- an independent legal adviser
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