1. Purpose
This policy sets out Leeds City Council's approach to enforcing the legal requirement for all letting agents and property management agents operating in England to belong to a government-approved property redress scheme.
2. Scope
This policy applies to Letting agents and Property management agents operating within the Leeds City Council's area who are required by law to be members of an approved property redress scheme.
Since 1 October 2014, letting agents and property management agents are required to be members of a government-approved property redress scheme (unless exempt), and to maintain this membership annually.
A fine of up to £5,000 can be imposed where it can be satisfied, on the balance of probability, that someone is engaged in letting or management work and is required to be a member of a redress scheme, but has not joined.
There are currently two approved schemes:
- The Property Ombudsman
- Property Redress
This policy has been developed having regard to:
- Enterprise and Regulatory Reform Act 2013
- The Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc.) (England) Order 2014
- Guidance: Lettings agents and property managers redress schemes (last updated 2 August 2018)
- Leeds City Council Private Sector Housing Enforcement Policy
3. Investigation process
The council may identify potential breaches through:
- complaints from tenants
- complaints from landlords
- intelligence from partner organisations
- proactive inspection activity
- licensing investigations
- website and marketing reviews
- information obtained during enforcement work
The list is not exhaustive.
4. Notice of Intent
Where the council identifies that a letting agent or property manager is not a member of an approved property redress scheme:
- officers will verify the agent's membership status. The council may require businesses to provide evidence of scheme membership
- if non-compliance is confirmed (on a balance of probabilities), a Notice of Intent will be served
- the agent will be given 28 days to:
- join an approved scheme; and
- submit written representations explaining the circumstances of the breach
5. Financial penalties
The council adopts a standard financial penalty of £5,000.
Where appropriate written representations are received within the 28-day notice period, and if officers are satisfied that mitigating circumstances exist, the council may reduce the penalty to £2,500.
Factors to consider when reducing the penalty:
- prompt action to join an approved property redress scheme
- immediate cooperation with the council
- evidence that a £5,000 penalty would be disproportionate to the size or turnover of the business
- evidence that the full penalty may cause severe financial hardship or threaten the continued operation of the business
- any other exceptional circumstances considered relevant by the council
- each case will be considered on its own merits.
6. Final notice
Following consideration of any representations received, the council will issue a Final Notice specifying:
- the amount of the penalty
- the reasons for the decision
- payment arrangements
- the right of appeal
Payment must be made within the period specified in the Final Notice.
7. Appeals
A letting agent or property manager may appeal the council's decision to the First-tier Tribunal (Property Chamber). Appeals must be lodged within 28 days of the Final Notice being issued.
The Tribunal may consider both:
- the decision to impose the penalty; and
- the amount of the penalty
The Tribunal may:
- (a) quash the final notice;
- (b) confirm the final notice;
- (c) vary the final notice
8. Recovery of financial penalties
The council will seek to recover all penalty debts.
If the penalty imposed is not paid within the appropriate time period, either 28 days from the date of the Final Notice or within such time as determined by the First-Tier Tribunal, the council will commence proceedings to recover the debt owed. This will include the recovery of any additional costs to the council from having to undertake such action. This process will be in accordance with the council's existing recovery policy and procedures for the collection of such debt including pursuance of the debt via the county courts if appropriate.
A certificate signed by the Chief Finance Officer for the Authority including the outstanding amount due will be accepted by the courts as conclusive proof of any outstanding payment due to the council.
9. Repeat non-compliance
Where an agent remains unregistered following enforcement action, the council reserves the right to take further enforcement action and issue additional financial penalties in accordance with the legislation.
There is no limit to the number of penalties that may be imposed where continued non-compliance is identified.
