A recent decision by a Property Tribunal in London (pictured) has shone a light on what appears to be an area of misunderstanding – or if I’m less kind, ignorance – among some landlords and letting agents about the Tenant Fees Act despite some seven years having passed since it went live.
Readers who have done their homework on the Act, which I realise on a good day can be a very dull read, will know that automatically charging tenants a fee or deposit deduction to clean their home if they have left it in a worse state than when they moved in is a prohibited fee under the act unless the process goes through one of the ombudsman services first.
Agents or landlords cannot get around this by charging exiting tenants a separate but vague ‘check out’ fee as this is a prohibited payment too.
The message has largely got through – cleaning disagreements are the single most common cause of end-of-tenancy deposit disputes in Britain handled by the two ombudsman services, featuring in more than 50% of all formal cases, so most disputed deductions have gone into that formal ‘funnel’.
But not so at International Property Investment Ltd, which gives its address as a flat in a less-than-salubrious area of Tower Hamlets. It is late submitting its latest Companies House confirmation statement and faces strike off.
The firm has been taken to a Property Tribunal after deducting £125 from the £650 deposit it returned to a tenants after he moved out of a flat the company manages – but with no reference to what the deduction was for, the Tribunal noted, saying rather that it was ‘automatic and mandatory’.
Silence
The tenant then took the firm to a Tribunal to force it to return the £125, to which International Property Investments responded with a wall of silence, unable or unwilling to reply to Tribunal requests to get involved, which they are obliged to by law. The tenant won his case, unsurprisingly, and the £125 must now be returned.
While it is depressing that there are still agents flouting the Tenant Fees Act 2019 so brazenly, happily the volume of Tribunal cases is declining from a high of 20 cases last year to only four so far this year.
But I suspect the number of agents and landlords deducting disputed cleaning costs from deposits without going through an official dispute process is much higher.
While the rump of the industry has long ago embedded the Tenant Fees Act 2019 into their office systems and training, there remains a small but significant number of unethical agents, often renting homes to poorer tenants, who leverage tenant apathy and/or ignorance to make a few extra pounds from tenancies.
It is this kind of issue that makes tighter and broader regulation of the industry a must-do for new PM Andy Burnham and his ‘new’ housing secretary Angela Rayner, surely?
