Local authorities have urged politicians to simplify the draft tenant fees bill to ensure it can be effectively enforced.
Speaking at a Communities and Local Government Committee meeting, Bournemouth Borough councillor Robert Lawton said the current draft legislation was “open to abuse” with a complex range of fees that could still be charged to tenants.
He also told politicians that there needed to be “effective deterrents” in the form of higher financial penalties to ensure compliance.
The proposed new laws will mean tenants can only be asked to pay their rent and an up-front deposit.The laws will cap holding deposits at no more than one week’s rent, and security deposits at no more than six weeks’ rent.
It will also lay out proposed requirements on landlords and agents to return a holding deposit to a tenant.
The Government will make it a civil offence to break the fee ban, with a fine of £5,000. However, this has led to concerns that this could prompt lettings agents to increase fees charged to landlords, the vast majority of which comply by all standards and regulations, and provide a valuable role in providing housing, according to this committee hearing.
Boston Borough Council’s head of housing, health and communities, Andy Fisher added that he also had concerns that this act would need to meet “criminal standards” for enforcement activity, but at such a low cost value – which could create problems for under-resourced local authorities.
There are concerns that fines imposed to those who breach these rules may not act as an effective deterrent, and will not reflect the costs involved in monitoring this activity, and bringing prosecutions. This could lead to cost consideration colouring a local authority’s decision to bring action, Lawton said.
He adds: “We need penalties that are a sufficient deterrent for inappropriate activity.”
All three local authorities suggested that there should be a “sliding scale” of mandatory fees for those breaching this new legislation. They said the ability to set these fines locally should be explored.
Lawton pointed out that when pursuing action against rogue landlords for breaching existing housing legislation, magistrates often handed out fines that “were at the lower end of any sliding scale.”
Giving evidence to the CLG, these authorities also called for an update to the Housing Health & Safety Rating System.
They said this would provide greater clarity to landlords operating in the private sector.
London Borough of Wandsworth’s cabinet member for housing, Clare Salier, says the act, which came into force in 2006, needed to be updated to reflect changes in the rented sector, which has seen a huge increase in the number and quality of homes rented through the private sector.
Lawton says: “The act is good but the average condition of properties which it lists has not been updated since 2006.”
He says this “baseline” was now below par and didn’t reflect the improvement in quality of housing seen since then.
There were also concerns that the new tenant fees bill will be under the auspices of trading standards, rather than monitored by housing officers at local authorities.
Fisher says his housing and enforcement officers were “regularly in contact with letting agents, landlords and tenants” and were better placed to monitor compliance in relations to this proposed legislation.